Wheat situation

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Material Information

Title:
Wheat situation
Uniform Title:
Wheat situation (Washington, D.C.)
Physical Description:
v. : ; 26 cm.
Language:
English
Creator:
United States -- Dept. of Agriculture. -- Economics, Statistics, and Cooperatives Service
United States -- Dept. of Agriculture. -- Economics and Statistics Service
Publisher:
The Service
Place of Publication:
Washington, D.C.
Frequency:
quarterly
regular

Subjects

Subjects / Keywords:
Wheat trade -- Statistics -- Periodicals   ( lcsh )
Wheat trade -- Statistics -- Periodicals -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
statistics   ( marcgt )

Notes

Statement of Responsibility:
Economics, Statistics, and Cooperatives Service, U.S. Department of Agriculture.
Dates or Sequential Designation:
WS-1 (Nov. 1936) - WS-254 (Nov. 1980)
Issuing Body:
Issued, 1936- by the Bureau of Agricultural Economics; <Oct.-Dec. 1953>-Feb. 1961 by the Agricultural Marketing Service; Apr. 1961-Nov. 1977 by the Economic Research Service, U.S. Dept. of Agriculture; Feb. 1978- by the Economics, Statistics and Coopertives Servie, U.S. Dept. of Agriculture; <Nov. 1980-> by the Economics and Statistics Service, U.S. Dept. of Agriculture.
General Note:
Cover title.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 000349017
oclc - 04015593
notis - ABY6688
lccn - 78643652 //r812
issn - 0364-2305
Classification:
lcc - HD9049.W3 U66a
ddc - 338.1/7/3110973
System ID:
AA00012162:00036

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Full Text

UNITED STATES DEPARTMENT CF AGRICULTURE
Bureau of Agricultural Economics
7Washington

WS-22 August 25, 1938.

THE WHEAT SITUATION
Including Rye and Flaxseed -

(Summer Outlook Issue)

Summary

Farmers are now making plans for the seeding of winter wheat and rye to be

harvested in 1939. This issue of The Wheat Situation, therefore, has been pre-

pared with particular reference to the outlook for wheat and rye crops to be seed-

ed this fall. Attention is also given, however, to the current domestic and world

wheat situation.

Summary of wheat and rye outlook for 1939

World wheat prices for the 1939-40 marketing year will remain low relative

to recent years, says the Bureau of Agricultural Economics, unless there is a

material reduction in acreage or a considerable improvement in world economic

conditions and in the world price level. United States wheat prices probably will

average somewhat above world levels if domestic production is reduced more nearly

in line with domestic disappearance or if a loan is in effect covering the 1939-40

marketing season,

The acreage allotted for seeding the 1939 wheat crop under the Agricultural

Adjustment Act of 1938 is 55 million acres. This compares with the 1928-32 average

seedings of 67 million acres, and 81 million acres seeded for the 1938 crop. The

extent of the participation by farmers in the acreage adjustment program is un-

certain. If tctal wheat seedings are reduced to 55 million acres, and average

yields per seeded acre are obtained, production would amount to about 660 million

bushels. This would be less than the average domestic disappearance of about 680

million bushels, and would provide an opportunity to bring about a reduction in





WS-22 -2 -

carry-over during the next marketing year. If two-thirds to one-half of the 1939

acreage is seeded by growers who keep within their acreage allotment, seeded acre-

age would be expected to be 6Q to 65 million acres. Average yields on such acre-

ages would result in a production 40 to 100 million bushels more than average dom-

estic disappearance.

If the wheat growrs in the United States should reduce their acreage to

about the 60-million acre level, and this reduction was not offset by increases in

other countries, such a reduction would reduce world acreage* so that production,*

on the average, would about equal the world's annual wheat disappearance*.

With rye prices only little more than h'lf of what they were in 1937 and

feed supplies ample, growers will probably reduce their rye acreage from that of

this year, when it is estimated that 3,914,00.0 acres wero harvested. For the 5

years, 1928-32, the harvested acreage averaged 5,315,000 acres. It is not probably

however, that the acr.ege next year will decline" to this average. An average acre-

age with average yields would produce a crop of about 40 million bushels which

would take care of domestic disappearance. If che acreage is larger than average

and yields per acre are average, the excess of sup-ly over disappearance would be

expected to be increased, unless price and supplies of rye relative to other feed

grains induced increased fe li i_.

Summary of outlook for wheat harvested in 1938

Prospective world wheat supplies*for the year beginning July 1, 1938, are

now indicated to be about 495 million bushels more than a y':ar ago. World stocks

of old wheat* on about July 1 have been estinatod at about 620 million bushels, or

about 75 million bushels more than a year earlier. Estiml.ted world wheat pro-

duction* is now estimated at around 4,255 million bushels, which is 420 million

bushels more than the crop of last year. The crop in the Northern Hemisphere* is

All references to world and Northe.-n Hemisphere supplies, production and dis-
appearance exclude Soviet Russia and China unless otherwise stated.


rr-





WS-22 3 -

indicated to be about 3,786 million bushels, or 395 million bushels more than last

year. On the basis of weather conditions to date, a production of 250 million

bushels is indicated for Argentina and 150 million bushels for Australia, which

together represent an increase of about 25 million bushels compared with last year.

World trade in wheat and flour in 1938-39 is now expected to be 25 to 50 mil-

lion bushels larger than last year. However, with larger crops in prospect this

year in European exporting countries, Canada and Argentina, wheat from the United

States will meet greater competition in foreign markets and exports will be less

than in 1937-38 unless the Federal Government takes steps to stimulate exports.

If there is not much change in demand, the large wheat supply in prospect

this year will result in lower world prices than were received in 1937-38. With

supplies in the United States large, domestic prices are expected te continue below

prices at Liverpool. Domestic prices are now materially below the loan level and

there will be a strong tendency for farmers to take advantage of the loan, which

would continue to restrict market receipts and give support to prices. On the othel

hand, with large supplies and a not very favorable export situation, any price ad-

vances which might occur probably will be limited,

Summary of the rye and flaxseed situations

Rye supplies in 1938-39, estimated at 62 million bushels, are 10 million

bushels or more in excess of usual domestic disappearance. These supplies may re-

sult in a large carry-over at the beginning of the 1939 crop year because export

prospects are less favorable than last year and there are ample supplies of feed

grains on hand.

The total domestic utilization of flaxseed in 1938-39 may again be made up
of more than one-half foreign flaxseed. On the basis of present yield figures and
prices of flaxseed and wheat, it appears that farmers will receive considerably
larger returns this year per acre of flaxseed than per acre of wheat. While flax-
seed prices during the next few months will probably be slightly below the general
level of prices a year ago, they are expected to continue well above prices during
the years 1930-35.




4


WHEAT: SOURCES OF U. S. SUPPLY. 1923-38


1923-24 '25-26


BUSHELS
I MILLIONS I

1.400


1.200


1.000


800


600


400


200


0


3-6















*33-34 35-36 '37-38


'rEAR BEGINNING JULY


" IMPOPTS FOR DOMESTIC UTILIZATIONt


'AUGUST ESTIMA TE


Figure 1


United States wheat production in 1937 and 1938 was again large following 4
tion, which reduced the record carry-over stocks accumulated from 1929 to 1933.
an average of 3j percent of total supuli-s, were necessary in 3 of these 4 years
in hard red spring and durum supplies.


years of small produc-
Imports. representing
to make up shortages


Wheat: Supply, distribution. and disappearance in continental United States. 1923-38


supply


I


LLCCKd July I


Crnp year
begin, ng
July


I 1
a |
r n r
: farmsni :
SI


In country
elevate rs
and millr,


a :.. ;
i 17000o TO" -
Sbushels bushels
With new wheat in commercial and


:Cmrnercial
: stocks 1
a


1,000
bushels
merchant mill


19Z3 35,239 37,117 28,956
1934 1 29,349 36,626 38,112
19k5 I 28,653 25,287 28,900
126 .7,071 29,501 16,148
037 s 26,640 21,'76 21,052
1928 19,568 19,277 38,587
1929 u 45,106 41,546 90,442
1930 a 60,215 60,166 309,327
1331 a 37,967 30,252 203,967
1962 1 93,769 41,585 168,405
19.3 a B 2,98L 64,296 123,712
1934 a 62,516 48,150 80,548
1335 44,39 31,729 21,951
1936 : 43,998 22,296 25,202
1937 : 21.8,1 11.942 16.197
19C8 : 59.25 31.833 28.333
With una? old wheat in all stocks positions


1937
1938 :


21.851
59,258


11.942
31.833


sln merchant:
s mills and:
I elevators :
: and stored:
i fcr cLheres
2/


1,000
bushels
stocks
31,000
33,000
25,b?'6
27,o35
40,038
34,920
51,279
59,170
41,202
71,714
107,052
83,114
49,524
50,590
51.899
5".21L


Total a


1,000
bushels

132,312
137,087
108,401
100,226
109,506
112,372
228,373
288,979
313,288
375,473
377,942
274,328
147,543
142,070
102.889
17-3.FA


I


New
orop

:


1,000
bushels

759,462
841,617
668,700
832,213
875,059
914,373
823,217
886,470
941;674
756,927
551,683
526,393
626,344
62?,766
873,993
5/955.989


Imports
(flour
included)
y1


1,000
bushels

14,578
304
1,747
77
188
91
53
354
7
10
153
4/15.569
34,617
34,441
648


9,o02 40.399 83,214 873.993
22.190 6/ 10,791 154,072 5/955.989


Tctal
supply


1-- 000
bushels

906,372
979,008
778,948
9.3,515
984,753
1,026,836
1,051,643
1,175,703
1,254,969
1,132,410
929,778
816,290
808,504
805,283
977.530
129.1627


64d 1 957.85
--- 1,110,061


1/ 1923 to 1926 Bradstrests, excluding country elevator stocks.
g/ Stocks in merchant mills and elevators 1923 and 1924 estimated in absence of actual figures: 1925 to
1938, Bureau of Censu figures raised to represent all merchant mills. Stored for others 1923 to 1929
estimated in absence of actual figures; 1930 to 1938, Bureau of Census figures raised to represent all
merchant mills.
?/ From reports of Foreign and Domestic Commerce of the United States. Imports include full-duty wheat.
wheat paying a duty of 10 percent ad valora, and flour In terms of wheat; and exclude flour free for
export as follows: 42,742 bushels in 1935-36: 14.363 bushels in 1936-37; and 93.737 bushels In 1937-38.
J Includes durum wheat returned from Montreal estimated at 1,500.000 bushels.
SIndicated August 1, 1938.
For 1937 excludes new wheat estimated at 12.500.000 bushels; for 1938 excludes 13.423,000 bushels
reported as new wheat by Bureau of Census.


27.28 29 30 '31-32


SProduction
Total supply Imports*

SStocks, July 1


I a I I I I


NEG 31820


J


----------- ...


I is


im


M11M MOM


$





5


WHEAT: DISTRIBUTION OF U. S. SUPPLY, 1923-37


25-26 '27-28 '29-30 '31-32 '33-2
YEAR BEGINNING JULY
4 INCLUDES FLOUR MILLED FROM DOMESTIC WHEAT ONLY


U, S. DEPARTMENT OF AGRICULTURE


Figure 2


NEG 31821 BUREAU OF AGRICULTURAL ECONOMICS


The large production in 1937 again increased carry-over stocks on July 1, 1938 to above average for
the years before record stocks accumulated from 1929-33. Exports of about 100 million bushels were
possible in 1937-38 because of small crops in Canada and Argentina. The quantity of wheat fed largely
accounts for the variations in total annual domestic disappearance.



Whest Supply, distribution, and disappsaranoe in continental United States, 1923-37
3 Distribution
Year 8 Exports and shipments 1/ I Disappearance 8
beginning xports Exports Shipments: :Feed(fed 1oods and: a Stocks
Jly (wheat :flour as floorr Total Seed lon farms"tomercial Ttal t June 30
r only) b wheat sincladsld)S : of wheat I feeds 4
S : I t : growere: / 3 :
1.000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
I bushels bushels bushels bushels bushels bushel bushels bushels bushels
With new wheat in commercial and merchant mill stocks
1923 78.793 67.213 2.973 148979 74.111 69,670 476.525 620.306 137,087
1924 t 195,490 59. 78 2,871 257.839 79.s95 55.727 477,146 612,768 108.101
1925 63.159 311,28 2,741 97.35 8 7.828 28,214 474,223 581.265 100,225
1926 1 5.250 9.761 3,082 209.093 83.261 31.261 46,391 613,916 109.50
1927 145.999 4,228 2,692 193,919 89,864 44507 544091 678,14 112.372
1928 103.114 38,106 3,172 144,392 t3.663 .566 513.852 654.071 228,373
1929 1 92.175 .179 2.983 143.337 83,353 58.769 477,305 619,427 288.879
1930 76.365 36.063 2.850 115.278 80,886 157,188 509.063 747.137 313.288
1931 3 96.521 26.376 2,757 125.654 80,049 173.991 499,802 753,842 375-,73
1932 20.887 10.979 3.023 34.889 83,513 124.912 511.154 719,579 377.942
1933 t 18.800 6.798 2,779 28.377 77,832 72.261 476,980 627.073 274,328
1934 3.019 7.512 2,783 13.3114 .220 83,700 489.513 655,433 147,53
1935 311 3.896 2.908 7.115 87,555 83,168 488,590 659313 142,076
1936 3168 6,099 3.009 12.276 96,872 93.282 497,964 68,18l 102,889
1937 3 81,264 16,350 3,321 100o935 96.049 110,257 496,651 702,957 173,638
With only old wheat in all stocks positions
1937 1 81,264 16.350 3.321 100.935 96.049 110,257 496,542 702,84 154.072

f/ from reports of Woreign and Domestic Commerce of the United States. Exports include only flour made
from domestic wheat; 1923-35 estimated on basis of total exports less wheat Imported for milling in bond
and export adjusted for changes in carry-over; beginning 1935 figures for exports of flour wholly from
United States wheat.
I/ Shipments are to Alaska, Hawaii. Perto Rico, and virgin Isla (Virgin Islands prior to December
31. 1934 included with domestic ports).
/ Balancing ittm.
/ To individual iteas see supply section.


BUSHELS
(MILLIONS)
1.400


1,200


1,000


800


600


400


200


0








ALL WHEAT: ACREAGE SEEDED. YIELD PER ACRE.
AND PRODUCTION. UNITED STATES. 1919-38


1919 1921 1923 1925 1927 1929 1931 1933 1935 1937 1939
PRELIMINARY A ACREAGE ALLOTMENT S.000.000 ACRES
U. IDE.I... OI A*.CU In I Figure 3 "EE MUirA OF ASIICULTUIAnL OcOiSICS
The wheat acreages seeded for harvest in 1937 and 1938 were the
slarget on record. Production In 1933-36 was greatly reduced as the
result of snail yields per acre caused by drought and runt. Yields
per seeded acre have been below average since 1931.


All Wheat: Acreage seeded, yield per acre, and
production, United States, 1919-g1


: ; Yield :
Tear Seeded : per Production
S acreage : seeded 3
S: acre 3
1,000 1,000
1 acres ubushel bushels

1919 : 77,440 12.3 952.097
1920 : 67,977 12.4 843.277

1921 : 67,681 12.1 818,964

1922 67,163 12.6 846.649

1923 : 64.510 11.8 759.482

1924 : 55.706 15.1 84.617

1925 : 61,738 10.8 668,700

1926 60.712 13.7 832,213
I
1927 : 65661 13.3 875,059

1928 3 71,152 12.9 914. 373

1929 66,810 12.3 823,217

1930 : 67,150 13.2 886,470

1931 65.998 14.2 9l1,671

1932 : 65,913 11.5 756,927

1933 : 68,485 8.1 551,683

1934 63.562 8.3 526,393

1935 69,207 9.1 626.344

1936 73,724 8.5 626.766

1937 s 81,362 10.7 873,993

1938 i 1 81,088 11.8 955.989

If Preliminary.










WINTER WHEAT: ACREAGE SEEDED. YIELD PER ACRE.
AND PRODUCTION. UNITED STATES, 1919-38
ACRES I I
I MILLuNS ACREAGE SEEDED PRECEDING FALL
55

50

45

40




30
BUSHELS
YIELD PER SEEDED ACRE
|o!
18

16

14
)o ------------ --- --- -- -- --- --- --




12




a
BUSHELS
I.ILLONS i PRODUCTION
1.000

o800

600 -^




200
1919 1921 1923 1925 1927 1929 1931 1933 1935 1937 1939
PRELIMINARr
U I DEPARTMENT OF AGIICULTURE Figure 4 NEIL 3.II 7 URIAU OF AGRICULTURAL ECONOMICS
There was little change in winter wheat acreage seeded for harvest
in the years 1929-34. Seedings for the 1936 crop, however, were increased,
and these for the 1937 and 1938 harvests were the largest in history.


Winter Wheat: Acreage seeded, yield per acre, and
production, United States. 1919-38


Tear : Tlield :
of 1 Acreage i per Production
harvest seeded : seeded
: acre s


1919

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

1931

1932

1933

1934

1935

1936

1937

1938


1,000
aere

51,391

45,505

45,479

47,415

45,408

38,638

40,922

40,604

44,134

48,431

43.967

45,032

45,647

43.371

44,445

44,585

47,064

49.765

57,612

57.316


Bushels

14.6

13.5

13.3

12.1

12.2

14.8

9.8

15.6

12.4

12.0

13.3
14.1

18.1

12.0

8.5

9.8

9.9

10.4

11.9

12.0


1,000
bushels

748,460

613,227

602,793

571,459

555.299

573.563

400,619

631,607

548,188

579,066

586,239

633,605

825,396

491,795

376,518

437,963

465,319

519,874

685,102

688.458


~/ Preliminary.







WHEAT:


BUSHELS
(MILLIONS)
800


700


600

500

400

300


200

100


0


STOCKS IN MAJOR EXPORTING COUNTRIES
AND AFLOAT, AS OF JULY 1, 1922-38


1922 1924 1926 1928 1930 1932 1934 1936 1938
INCLUDES STOCKS IN UNITED KINGDOM PORTS, SUPPLIES AFLOAT TO
UNITED KINGDOM, CONTINENT AND FOR ORDERS
A INCLUDES CANADIAN WHEAT IN UNITED STATES NEG Z1335
t INCLUDES UNITED STATES WHEAT IN CANADA
Figure 5
After reaching record size in 1933, stocks of wheat in major exporting countries and afloat by
1937 had been reduced to about the level which existed from 1922 to 1927. This reduction was largely
the result of small world crops. The large stocks which accumulated from 1929 to 1933 were partly
the result of increased production, but they also resulted from measures which importing countries
took to reduce their wheat imports, and the effect on demand of the world-wide depression. Stocks
were again increased in 1938. With world production in 1938 greatly in excess of usual world disappear-
ance, stocks in 1939 are expected to be substantially larger than in 1938.

Wheat: Stocks in major exporting countries and afloat, as of about July 1, 1922-38


I United States
ear : Lilli .,n.


15;22
1925
1929

1926
1929
1932
1931
1932
193?

1935
1936
1937
1938


110
1354
137
111
101
ill
111
115
232
294
3s
391
3s2
274
14S
142
103(83)
174(155)


Crnsdian
gr;.in 2j
million bush.

4s8
44
67
48
63
67
128
152
15Lk
158
11;9
238
222
226
155
52
35


Argentina.
*


Million bush.

82
b7
79
73
S5
39
107
155
70
94
73
98
143
105
72
59
75


Aus tralia


:lii]j .,. h.

-.
41


40
?8

43
47
57
77

70
101
67
52
53
60


United
Kin don .j :


61
56
62
51
53
59
61
61
144


44
48

37
45
49


Total

million n Lu=h.

; 0
342
384
327
330
?72
454
647
-19
713
739
832
788

312
393


Compiled as follows United States Stocks on farms, in country mills and elevators, commercial, in merchant
mills and elevators, and stored for others by merchant mile.
Canada 1922 1923, carry-over August 31, plus net exports and estimated retention of flour during July and
August. 1924 to date, carry-over July 31, plus net exports and estimated retention of flour for July.
Argentina Carry-over on December 31, plus exports end estimated domestic consumption, July 1 to December 31.
Australia 1922 1924, exports only plus estimated domestic consumption, July 1 to December 31. 1925 to
date, carry-over on December 1, plus net exports and estimated domestic consumption, July 1 to November 30.
1/ Includes United States wheat in Canada. / Includes Cansdian wheat in United States. 3/ Includes stocksin
unitedd Kingdom ports, supplies afloat to United Kingdom, Continent, and for orders.


--


--- ---~--'--~-- -











WHEAT: ESTIMATED ACREAGE. YIELD. AND PRODUCTION. WORLD
( EXCLUDING SOVIET RUSSIA AND CHINA ). 1923-37


3.000 ----j-4-
1923 1925 1927 1929 1931 1933 1935 1937
ACREAOE HARVESTED EXCEPT IN U S. CANADA AND ARCENTINA 4 PRELIMINARY -NE 15s4
us OE.E r..ENT Of rAklCULTruR Figure 6 BUREAU Of AOSICULTURAL ECOOnICS
World wheat acreage has been steadily increasing over a period
of years while yields per acre have been declining. Average yields on
the present level of acreage would result in production in excess of
average annual world disappearance. Yields per acre in 1938 are above
average and the carry-over will accordingly be increased.


Wheat: Estimated acreage, yield and production,
world (exllading Soviet Russia and China
1923-37


Tear : Yield
of : Acreage g/ per : Production
harvest 1 i acre I
I Million Million
I acres Buahel* buahels

1923 2 235 15.0 3.519
1924 a 22s 13.7 3.12

1925 1 240 14.1 3,380

1926 243 14.4 3.494

1927 2a46 14.8 3,673
1928 264 151 3.996

1929 a 257 13.9 3.584

1930 a 266 14.5 3.847

1931 264 14.6 3.865
s
1932 269 14.4 3.865

1933 t 272 14.1 3.835

1934 265 13.4 3.543

1935 3/ W 269 13.4 3.601

1936 .I a 276 12.8 3.540

1937 3/ s 286 13.4 3.824

I/ Refers to year of harvest in Northern Hemisphere, although it includes
data for the Southern Heuasphere where the harvest ends early the following
year.
2/ Acreage harvested except the United States, Canada and Argentina.

3/ Preliminary.






10

WHEAT: WORLD SUPPLY AND PRICE, 1922-37


SUPPLY
(BUSHELS)
(MILLIONS)

5,000

4,800

4,600 ( --

4,400 -i
I
4,200

4,000 --

3,800

3,600
1922-23 '2
YEAR BE
A VERAGI
U. S. DEPARTMENT OF AGRICULTURE


5-26 '28-29 '31-32
GINNING JULY
SBRITISH PARCELS DEFLATED BY ST.
Figure 7


PRICE
(CENTS PER
BUSHEL)

130

120

110

S 100

S- 90


80

S70


60
'34-35 '37-38

4TIST INDEX (1910- 14=100)
NEG. 20691 BUREAU OFAGRICULTURAL ECONOMIC S


Large wheat supplies in 19g3-39 will result in world prices lower than in 1937-38. Prices In
Liverpool reflect changes in world supply and demand conditions for wheat. In other countries prices
may be relatively higher or lower than those at Liverpool as a result of domestic conditions, including
governmental control.


Wheat: Estimated world supply, disappearance and prices, 1922-38

SProduction 3 .. ; Stritish
Tear : : Canada : er Stok Total t Total Parcel
beginning: : Argen- tA : orld : ro about supply : disa average
July United Atl d from about price per
July : Uited and Eurooe : : pro- :Ruia :pearance: price per
SStates : Aur t other- action : sia July 1 : bushel
t I tralla I 2 :
llto Million Million Mll llon M million illon lion Yllion Million Million
:bushels bushels bushels bushels bushels bushels bu-hels bushels bushels Cents


1922
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
193;
1935
1936
1937 3/


705
847
618
701
798
880
1,075
594
867
732
898
745
650
568
620
554


1,o45
1,257
1,o05
1.397
1,216
1,274
1,410
1,461
1 360
1,436

1.548
1,576
1,481
1.54
3I,I~la


3.203
3.519
3.127
3.380
3.,49

3. s
3.996
3.594
3.865

3.543
3.601
3.540
3.824


577
723
573
653
687
751
1.':20
943
1,043
1,144
1,?98
954
770
547


3,851
,117
3.s60
3,980
4,196
4.365
4,747
4,902
4,981
5.013
4.743
4,585
4.3124
4,2409


3,274
3.394
3.277
3.327
3.509
.614

3,856
3.938
3,782
3.515
3.789
3,814
3.767
1/, 79c


Excludes production and stocks in Soviet Russia and China.
Deflated by Statist Index (1910-14 = 100) and converted at par.
Preliminary.
Production ani export figures from official sources. Prices compiled from daily prices in the London
Grain, Seed and Oil Reporter.





11


WHEAT: PRICES AT LIVERPOOL AND KANSAS CITY, AND
NET EXPORTS FROM UNITED STATES. 1923-38
CENTS PER ,--------- -- -.
BUSHEL
200 --Liverpool parcels -- PRICES




160 a-


Kansas City l

120 9- -




80 ---- -




40


SPREAD BETWEEN KANSAS CITY
AND LIVERPOOL




ERPOOLAND CARRYOVER
PARCELS







AND CAROYear-end stocks
400 Net exports
Ior imports
300 ------ -

200 .....- .--. EXPORTS -- -
100 -------------------- -- -- -- -expors -
100 --

0 IMPORTS
1923-24 '25-26 '27-28 '29-30 '31-32 '33-34 '35-36 '37-38
YEAR BEGINNING JULY
&PRELIMINARY NEG, 34547
F -1urI
In 1937 wheat prices in the United States adjusted to an export
basis, after having been materially above world price since the be-
ginning of 1933. High prices relative to Liverpool were largely the
result of 4 successive years of very small production in the United
States. The general trend in wheat exports during recent years has
been downward, but small supplies in other surplus wheat producing
countries resulted in exports of about 100 million bushel in 1937-38.
Large supplies are available for export and carry-over in 1935-359,







12



Whemt Average price per bauhel. Lverpool nad Kansa City. and spread between these prices, by months. 1922-38

I Parcel I2 go. 2 Bard I Spresa Parcels l Mo. 2 ard I Spread P oarcls : o. 2 FBrd I Spresa
Month a Liverpool I Winter. Kansas City Lnder Liverpoool I Winter, sla as City under Liverpool Ir Wnter rItase C&Ot under
S 1i :biase Cityl Liverpcrl / I Kaanms City Liverpool 1 u llanas Citys Liverpool


I Ceant


Cents Centa Cents ii c Cents csa Cents


aIJuly li1.
aV. 3 129.1
Sept. I 122.0
Oet. 134.3
Now. I( .9
Do. I 10.8
Jan. 1 137.8
mWb. 135.7
iar. l 3O. 7
Apr. 10.7
May 138.6
June 1i.4L


July 168.
Ag. 172.2
Sept. t 159
Oct. 1s.5
Now. 3 1614.3
Dec. 0 184.7
Jan. 180. i
TOR. t 175.1
Mar. I 160.8
Apr. a 170.9
May 1 173.1
June s 168.8


112. 1
104.,
104.5
113.1
117.C
117.11
114.!
115.1

120.4
116.2
104.2

1925-26
1W.9
153.9
157.5
155.2
162.5
171.6
178.1
171.0
160.5

152.9
15P-9


122.9
119.6
118.9
120.5
118.9
117.2
121.0
124.4
119.6
119.6
121.2
125.e


95.5
100.6
109.1
111.9
108.8
108.7
112.9
110.9
108.7
104.3
106.3
108.1


27.1 120.5 120.5 20.3
19.0 151.5 119.0 32.5
9.8 154.7 119.5 35.2
8.9 173.e 136.9 36.9
10.1 176.3 143.1 33.2
8.5 182.9 161.6 21.3
8.1 1 .3 181.5 17.5
13.5 20Do.8 181.2 23.6
10.9 191.8 170.9 20.9
15.3 170. 150.9 19.4
14.9 18 .2 162.9 21.3
17.7 178.3 160.2 18.1


1926-27 1927-.8
166. 136.5 30.4 161." 135.6
16,.* 131.0 31.- 159.5 135.3 212
159.6 132.0 27.6 1. 130.6 20.
171.3 138.6 32.7 1 .1 128.2 21.2
170.9 136.9 31.0 147.0 130.6 16.4
163.5 131.7 25.8 147.5 131.s 15.7
160.2 157.2 23.0 149.5 132.7 16.8
157.1 135.6 21.7 145.8 132.6 13.2
155.5 132.5 22.7 151.0 138.2 12.1
15.9 130.7 25.2 159.0 152.' 6.6
1.6 142.1 22.5 1 .1 160.0 4.
165.2 14i.1 21.1 lr6.9 147.5 0


Julay a o.8
Ag. 1 125.8
Sept. 125.8
c0t. 128.6
Nov. 1 125.9
Dec. 3 126.,
Jan. 130.6
Web. 1 153.7
ar. 3 131.4
Apr. 124.9
May 115.7
Jurm 116.8


1928.29
120..
105.9
107.5
log. e
112.4


115.8
110.1.
ICr .b

105.0


20.4 14iD.
19.9 111.1
18.3 137..
18.8 136.0
16.5 127.1
15.1 140.8
16.1 19.
16.4 12:.6,
15.6 117.5
1 .4 120:.1
15.1 11U.6
11.8 109.9


1931-52
July a 62.0 13.8 18.2
Ae. 52.8 12.7 10.1
Sept. $ 53.0 43.1 9.9
Oct. 58.) 47.5 10.8
Pow. a 66.9 5s.6 8.3
Dec. 57.5 52.1 5.1
Jan 3 56.1 52.6 3.5
Teb. 3 59.9 53.1 6.1
Mar. 1 63.6 51.2 12.4
Apr. 63.7 5).2 10.5
May a 61.3 .3.6 7.7
June 5. F 5.6 9.1


1929-30
125.3
122.
12.11
121.7
118.7
120.7
118.9
112.6
102.;
101.i
99.1
88.7


1932-33
53-9 4.9
57.? 47.7



17.7

61.0 7o.0
.2 4875.C
.7 45.2
52.0 42.6
14.6 41.
F0e. 43.6
47.2 43.7
47.5 4g.1
51.7 60.114
61.0 70.0
62.7 75.9


10o. 50.0o 211.3
105.6 a.6 25.0
91.4 77.6 13.8
55.7 I.1I 11.3
10.6.0 11.:
73. 70.6 2.
68.1 69.5 1.
70.2 69.3 0.9
67.0 70.2 3.2
70.7 73.0 2.3
72.2 73.1 0.9
66.6 65.2 1.6


1933-34
9.0 79.2 98.C 18.5
9.7 67., 89.7 22."
11.2 12.e 87.1 1i.3
9.' 60.5 .C 22.5
9.1 6s.3 2(.1 15.s
6.8 65. g. .b 15.0
6.E 69.3 gs.l 15.1
3.5 6.2 85.0 1l8.
- 0.6 67.0 82.0 15.0
- 8.7 68.0 77.7 9.7
- 9.0 66.7 s5.7 19.o
-13.2 67.1 89.1 22.0


1931.35 1935-36 193637
76.1 9.2 17.1 82.6 992 9111.0 11.1
93.5 16.6 12.7 56.0 10.1 1.1 115.3 122.0 6.
S 85. 107.5 21.7 91.2 115.1 2.9 113.6 122.1 5.5
76.7 102.2 25.5 95.6 19.0 20. 119.3 122.0 .7
76.o 101.8 25.8 6.3 112.6 26.3 15.1 1219 6
8o.8 104.2 23.4 93.1 110.8 17.7 12s.6 134.2 5.6
S 7.3 100.9 22.6 99.2 112.6 13.14 132.4 138.0 5.6
76.0 99.6 23.6 91.11 110.0 18.6 125.0 136.5 11.5
S so0.2 96.S 16.6 92.4 105.9 13.5 1 6.1 1 &.6 2.5
80.0 101.6 24.6 89.1 102.0 12.9 49. 1.0.
I 8.o0 98.8 1l.5 86.8 94.9 8.1 141. 132.0 9.6
79.0 87.7 8.7 5.9 96.0 10.1 13}.4 10.8 12.6
1937-38 193)-9 1939-0


July 13.1 122..5 2.
Arr. I 131.8 111.8 2
Sept. 136.0 209.5 265
Oct. 1 137.2 106.0 31.2
Wow. 135.7 91.2 41.5
Dec. I11o.3 96.5 43.8
Jan. 119.3 102.7 16.6
Feb. 1 129.8 99.6 30.2
ar. 109.5 91.5 18.0
Apr. 1 '7.7 8. 6 23.1
ay 99.0 79.7 19.
June 100.7 7b.7 24.0


98.2 7fU.


SParcels an loss than cargo lots.

Compiled u ofllosl Ksasu City Kansas City grali Maket Blevie. Average of dally prices weighted by carlo sales. Liverpooll Brnoehal's
Corn trade Iew. Simple average of daily price. Converted from shillings per parcel of 480 pounds to cents per bushel of 60 pound as fallowil
July 1922 Dec. 1925. current monthly era ge rates of exchange. Jan. 1926 rAg. 1931. as pr. Per (Ehilling) 214.332 cents.
Sept. 1931 to date. mrrent monthly average rates of emchmage.

heuts Supplies for export and carry-over. United State. 1923-38

Tear I Net Stocks II T r : Wet Stocki g Iear I lat 8 Stocks
beginning I exports or I at end Is beginalag I exports of I at end is beglnltg I sports or I at and
July I imports I of eear I& July a sports I of year aI Jul I imports I of year
1 1.000 bushels 1.000 bushel IIas 1.000 bushels 1.000 buahelol ll 1.000 buashel 1.000 buMhels
II II
192 1 131.4128 137.087 ,s 1929 1 o.301 288.879 II 1935 If .-0o.1o 142.o76
1924 a 25.661 108.401 II 19)0 112.074 313.288 II 1936 / -25.174 102.889
925 92.70 100.22 II 1931 122.90 375.73 11 1937 96.966 173.638
926 205.934 09.506 I 1932 .36 77.942 1 93S
1927 191.059 122.372 il 193) 25.1 27k.32 1 19
1928 1111.129 228.373 191 5.0 117.5 II 194
a II I II
Mi n s sI a LnLcates that Imports ars greater than exports.


July I
Sept.
Oct.
5o?. I
Dec.
Jan.
1Nb.
Mar.

Nay
June


29.2


---- -- ---- -'" --


SM





WS-22


- 13 -


CUTIOOK FOR 1939 WHEAT I/ CROP

BACKGROUND 2/- The acreages seeded to wheat for harvest in
1937 and 19788, estimated at 81 million acres, were the largest
in the history of the country. The acreage seeded for harvest
in 1919 was the largest on record up to that time. For the
1919 to 1924 crops, seeded acreage declined from 77 million
to 56 million acres. By 1928, however, it had risen again to
71 million acres and during the 1924-33 period averaged 65
million acres. For the 1934 crop, seeded acreage was reduced
to 64 million acres, but the next year it was increased again
to 69 million acres and for the 1936 crop was raised to 74
million acres. (Seeded acreage shown on fig. 3 and 4).

The present world acreage of approximately 288 million acres is about 17
million acres, or about 6 percent, above that necessary with average yields per
acre, to produce a crop equal to the 10-year (1927-36) average annual disappearance
of about 3,775 million bushels (fig.7). World yields per acre have fluctuated
within a Very narrow rare, since wide variations in various regions of the world
have been largely compensating. In most years the range is only about one-half
bushel above or belcw the 14-bushel average. During the 15 years, 1923-37, yields
were lom-est in 1936 when they averaged 12.8 bushels and highest in 1928 when they
:were 15.1 bushels (fig,6).

Unless the- world -he .t acreage is adjusted downward, very large supplies
will probably continue to be burdensome during the 1939-40 season and any improve-
ment in world prices would depend upon improvement in demand. Wheat prices in the
United States arc expected to average above world levels (fig.8) if domestic pro-
duction is about equal to or ::less than domestic requirements or if a loan 3 is in
effect.

The acreage allotted for seeding the 1939 wheat crop under the Agricultural
Adjustmrrnt Act of 1938 is 55 million acres. This compares with the 1928-32 average
seedings of 67 million acres, and 81 million acres seeded for the 1938 crop (fig.3).
The extent of the participation by farmers in the acreage adjustr-nt program is
uncertain. If total wAhcat seedings arc reduced to 55 million acres, and average
yields per seeded acre are obtained, production would amount to 660 million bush-
els. This would be less than the 10-year (1928-37) domestic disappearance of
about 680 million bushels (fig.2), and would provide an opportunity to bring about

/ Rye outlook statement on page 33 .
2/ See nlso background statements on pages 15 and 21
Y Wheat loans 2-, mandatory under the Agricultural Adjustment Act of 1938 when
the farm pric" on June 15, or any time thereafter, is below 52 percent of parity,
or when th: July crop estimate is above normal year's domestic consumption and
exports. Loans to cooperators are at the rate of 52 to 75 percent of parity; to
non-coopcrator? at 60 percent of the rate applicable to cooperators. Loans are
made to non-ccp',.rators only in marketing quota years on as much of their wheat
as would be penalized if marketed. Loans not available in years for which market-
ing quotas were rejected by referendum.






WS-22


- 14 -


a reduction in stocks during the marketing year. With a production of around 660
million bushels, domestic prices might rise above world levels, although the large
stocks would tend to offset the influence of the smaller crop. Large carry-overs
of milling wheat in prospect for July 1, 1939 assure ample supplies by classes in
1939-40,

If two-thirds to one-half of the wheat growers kert within their acreage
allotments in 1939 and other growers planted about their usual acreage, seeded
acreage would be expected to be 60 to 65 million acres. Average yields on such
acreages would result in production of 720 to 780 million bushels, or 40 to 100
million bushels more than average domestic disappearance. In most years the range
in yields per seeded acre is betweor 10 and 14 bushels. Ssedings of 60 million
acres in 1939 on this basis would ri-rult in a probable production of 600 to 840
million bushels, or somewhere within the range of 80 million bushels less to 160
million bushels more than average domestic requirements.

If the wheat growers in this country should reduce their acreage to about
the 60-million acre level, and this reduction was not offset by increases in other
countries, such a reduction would reduce world acreage so that production, on the
average, would about equal the world's annual wheat disappearance.

Production in excess of domestic disappearance, which includes wheat for
feed (fig. 2), must either be exported or go to enlarge the domestic carry-over
(fig.8). World trade in whc-..t has decline d sharply since the peak year of 1928-29,
largely as the result of drastic restri-cions on imports and increased production
in major importing countries. In the early part of this period exports from the
United States declined with those from other surplus producing countries. During
the period 1934-36 snall crops in the United States, the result of abnormally low
yields per seeded acre, were followed by net imports. In 1937 production in the
United States was again large (fig. 8) and about 100 million bushels were exported
leaving about 70 million bushels to be added to the carry-over (fig. 2). Large-
scale exports in 1937-38 resulted from the small world carry-over and small crops
in Canada and Argentina. Exports during 1938-39 are unlikely to be as large as
last year unless the Federal Government takes steps to stimulate exports. Unless
production in other major exporting countries is unusually small or there is a
considerable increase in export demand b-yonr. present expectations, the export
market for United St:.tes wheat in 1939-40 will be less favorable than in 1937-38
or 1938-39.

THE 'ELRLD WHEAT SITUATION

BACKGROUNTD.- Total worli supplies* increased sharply from
1 4- to 1933 (fig.7), largely as the result of the increase
ti acreage. From 1933 to 1936 world supplies declined fol-
lo:,ing successive s .rs of snrill production and increased
world demand. In 1937 world supplies were only moderately
larger than in 1936. Apparent world disappearance has
averaged about 3,775 million bushels during the past 10 years.

* Stocks, production, and disappearance for Soviet Russia and China are ex-
cluded throughout this report.





- 15 -


During the 1924-33 period, when world supplies were in-
creasing, world prices declined, reaching the low point as
supplies reached the-high point. From the spring of 1933 to
the summer of 1937, world prices moved steadily.upward, re-
flecting higher v-crld commodi.ty price levels, four successive
bclo.--average harvests in North America, and the 1935-36 short
Southern Hurrisphure crop. In 1936-37 wheat prices advanced
sharply as a result of increased demand and the smallest sup-
plies in recent years. Then, during the 1937-38 selling season,
wheat prices declined gcnnrally, with somewhat larger supplies,
uncertain prospects for world business activity, and weakness
in the general price level.

Prospective world heatt crop largest on record

The estimated world wheat production* in 1938 4/ is now indicated at around
4,255 million burhels, which is 420 million bushels more than the 1937-38 crop.
The Northern Ecmisphero total now appears to be about 395 million bushels above
that cf l-st yc.',r. Of this amount North America accounts for 230 million bushels.
On the basis of vj.:thor and yield studies the total crop in Canada 5/ is placed at
330 million bushels.

The first estimate of winter wheat production this year in Cancda is placed
at 20,037,000 bushels, harvested from 742,100 acres, a yield per acre of 27 bushels.
The yield per acre in 1937 was 26 bushels. The acreage of spring wheat sown in the'
Prairie Provinces is estimated at 24,946,000 acres, which is an increase of 347,000
acres over the 1937 spring wheat acreage in these provinces. On the basis of
weather and condition to date, the Canadian crop is now forecast at around 330 mil-
lion bushels. TLc Dominion Bureau of Statistics reported that the condition of the
spring crop had declined during July, and on July 31 was estimated to be 82 percent
of the lcng-time averagee ccmrp-:red with the June 30 estimated condition of 91 per-
cent. Conditions in the Prairie Prcvinces were variable. In Manitoba the ccnditiori
on July 31 was the same as a month earlier but was slightly below that of July 1937.
In Saskatchewan ,pring wheat deteriorated appreciably. High temperatures and lack
of sufficient moisture caused considerable damage. Widespread rust and extensive
grasshopper dar.'gc also were contributing factors to the decline from 95 percent
of normal, at the beginning cf the i:onth to 75 percent at the end of July. This
condition figure, however, compares very favorably with that of only 14 percent on
July 31, 1937. In Alberta no change has been noted during the month.

During th first half of August good harvesting progress was made throughout
Canada. The effects of stem rust in Manitoba and eastern Saskatchewan are becoming
more apparent as harvesting takes place :nd yields of susceptible varieties will
be reduced appr:ciabjy. Grasshoppers roe active and doing considerable damage in
parts of Manitob. and Saskatchewan. Severe hail storms took heavy toll in parts of
Saskatchewan and Alberta. Sone loss frcm the wheat stem rawfly was reported in
Alberta, :where warm bright weather is now needed to hasten ripening.


4/ Includes the Southern Hemisphere where harvest uxtonds into early 1939.
T/ See page 22 for discussion of crcp prospects in the United States.


WS-22






WS-22


- 16 -


A total production of around' 1,670 million bushels is now indicated
in Europe, excluding Soviet Russia (table 1). This would be the largest
harvest reported .Since 1933. Uniformly favorable growing and harvesting
conditions during July improved the crop outlook materially. The increased
estimate is largely the result of better outturns than previously indicated
for the Danube Basin and the Mediterranean area--especially for Italy and
France. The harvest in the Dr:nubian countries and in Greece and Turkey is
now virtually finished and a record crop is forecast. The Danube Basin crop
is estimated at 436 million bushels compared with the previous record of 384
million bushels reported in 1936.

Estimated production of durum wheat in the four principal producing
countries of Italy, Algeria, M-rocco and Tunisia is placed at 119,536,000
bushels compared with 120,5CO,000 last year and 107,680,000 bushels, the
5-year (1932-36) average (table 11).

In Soviet Russia unfavorable weather prevailed over a large part of
the country during the past month, r;'s,2ting in crop deterioration in a
number of regions. The Berlin office of the Bureau of Agricultural Economics
reports that prospects for -.inter crops are, on the whole, more favorable
than for spring crops. In the important producing Volga region, prospects
are reported to be definitely low, as hot dry weather has been unbroken for
several months. Iarvesting'started toward the end of June and was in full
swirg by July 20. Rapid and simultaneous ripening is reported to have in-
creased the normal strain at harvest time. Hoat and strong winds and a
significant amount of lodged grain, -re factors, reported to be increasing
harvesting losses. Delayed rap-irs to tractors and combines and a reported
shortage of spare parts would also point to harvesting losses at least as
great as the heavy losses of 1937.

In north..rn Africa harv._sting is virtually completed and threshing is
general. The total production is indic-ited to be a little above that of
last year. In Morocco the yield is r-rtimated to be well above that of last
year. In Tunisia, hoL',ver, a smaller crop is indicated for this year.

The latest estimate of the crop in India is 402,453,000 burhels com-
pared with 392,075,000 in 1937. It is g~enrally felt that the current crop
has been overestimated,

On the basis of weather and yield studies, the crop in Argentina is
tentatively placed at 250 million bushels, compared with the 1937-58 harvest
of 185 million bushels. Wheat seeding in Argentina is virtually completed.
The sovin acreage is reported to be about 5 nurccnt above th-t of last year
and condition in general is above Iverago.

In Australia conditions to date s-cem to indicate a crop of about 150
million bushels compared with 187 million for the last crop. The first
official estimate of the area sown is 14,178,000 acres, an increase of 3
percent over last year. Gener-il rains are needed throughout the country as
a deficiency of sub-soil moisture continues.





- 17 -


Table 1.-Production of'wheat in specified countries, 1935-36 to 19"8-39



Country : 1935-36 : 1936-37 : 1937-38 : 1938-39

: 1,000 1,000 1,000 1,000


NORTHLT H-IIISI : 1
North America:
United States .........
Canada .... .........
Mexico ...... ..... ... .
Total (3) ............
Europe:


bushels


'L01S:Sel S


S626,344 626,766
281,9`5 219,218
: 10,712 13,606
918,991 859,590


bushels

873,993
182,410
10,586
1,066,989


bushels


955,989
1/ 330,000
2/ 12,000
1,297.989


England and Wales ......: 60,592 51,445
Scotland ............... 4,480 3,547
Northern Ireland .......: 362 273
Ireland ...............: 6,686 7,839
Norway .. ...............: 1,869 2,094
Sweden .................: 23,610 21,635
Derm.lrk ..., ..........: 14,672 11,266
Netherlands ............: 16,653 15,428
Belgium ............ : 16,101 16,153
France ..2.... .........: 234,950 254,618
Spain ..................: 157,986 121,492 4/
Luxemburg ..............: 1,022 1,071
Portugal ........ .: 22,092 8,651
Italy ................: 282,760 224,570'
Switzerland ............: 5,974 4,470
Germany ...............,: 171,488 162,660
Austria ................: 15,509 14,039
Czechoslovakia .........: 62,095 55,583'
Greece .................: 27,180 19,537
Poland .................: 73,884 78,357
Lithuania .............: 10,093 8,027
Latvia ......... ...: 6,520 5,272
Estonia ............ .: 2,267 2,433
Finland ................: 4,233 5,259
Malta ..... ........... 179 236
Albania ............ 1 554 1,106
Total (26) ...........: 1,274,811 1,097061 1
Bulgaria ...............: 47,925 60,350
Hungry ..............: 84,224 87,789
Rumania ................: 96,439 128,717
Yugoslsvia ...*..........: 73,100 107,422
Total (4) ............: 301,688 384,278
Total Europe (30) ....: 1,576,499 1,481,339 1


52,005
4,181
164
6,990
2,497
25,720
13,522
12,555
15,550
253,537
152,000
1,206
14,540
296,284
6,221
164,120
14,470
51,266
52,373
70,774
8,109
6,302
2,786
7,665
326
1,466
,196,629
64,910
72,158
138,158
86, 53
361,479
,558,108


(

(


64,300


Continued-


3/ 8,100
S/ 2,600
3/ 24,600
3/ 12,900
15,432
16,167
4/ 312,300
4/ 102,900
1,228
16,534
5/ 257,000
6,213
/ 180,000
3/ 15,600
E/ 60,600
T/ 33,100
/ 80,800
3/ 8,100
3/ 6,200
53/ 2,800
3/ 6,200
/ 300
2/ 1,500
1,255,474
59,116
94,357
181,511
100,897
435,881
1,671,355


--


-


WS-22





- 18 -


Table 1.-Production of wheat in specified countries, 1935-36 to 1938-39-contd.


Country


: 1935-56 : 1936-37 : 1937-39 : 1938-39


: I ,COO
ITOrTHZR1T HEMISPERE-Contd: buEhels
Africa:
Algeria ................: 3:,532
Morocco ................: 2C ,036
Tunisia ................ 1.,902
Egypt ..................: 23,222
Total (4) ..........: 692


1,000
busL.els

29,774
12,234
8,083
45 700
95,791


1,000 1,000
bu shels bushels


33,106
20',895
17,637
45,376
117,014


33,101
26,051
13,962
45,929
119,043


Asia:
Palestine ..............: 3,834 2,795 4,682 4,000
Syria and Lebanon ......: 18,520 1.?,704 17,210 2/ 18,000
India ..................: ?63,216 351,650 64 ,075 402,453
Japan .................: 48,718 4-5,192 5 '50,410 50,644
Chosen ................: 9,747 8,095 1,01 10,333
Turkey ................: 9?,641 Il,582 136,483 6/ 147,000
Total (6) .............: 536,676 565,048 583,901 632,430
Total 43 countries ...: 5,583001,78 326,012 3,720,817
Estir ated Northern
Hemispi.ere total,ex- :
cluding Russia and
China .................: 3, 25,00. 3,067,000 3;392,000 3,786,000


SOUTHERl I[EMISIr:E- :
Argentina ...............: 141,462
Australia ............... : 114,213
Union of South Africa ....: .3,709
Estimated world total,
excluding Russia and


249,193 184',801 1/ 250,000
151,390 83,'918 2/ 150,000
16,077 10,157 2/ 11,000


China .................: 3,601,C00 3,54C,000 3;,55,000 4,257,000
,_

1/ Based on weather conditions to date.
j/ Approximation.'
3/ Estimate of the Berlin office of the Bureau.
4/ Estimate of the Paris office of the Bureau.
_/ The Paris office of the Bureau regards this officia-l estimate as
being too high.
6/ Estimate of the Belgrade office of the Bureau.


Compiled from official -Iata except as otherwise noted.


WS-22


II


CC


I







- 19 -


World stocks* about 75 million bushels lar er than year ag

World stocks cf old crop wheat 6/ on about July 1 are now tentatively
estimated at 620 million bushels, -wh-,ich is about 75 million bushels more than
those of a year earlier (table accompanying figure 7). This is 25 million
bushels less than the tentative estimate of a month ago. Estimated stocks
in the four principal exporting courtries and afloat are shown on figure 5.
Information regarding stocks in Furcpean countries is incomplete, but they
are believed to be about the same as a year ago. Stocks in the Orient also
are probably about the same.

The amount of the increase in United States stocks approximates the
increase in the estimated world total. Small increases in stocks indicated
for Argentina and Australia are' about offset by decreases in Canada and in
the United Kingdom ports and afloat.

If the final estimate of old stock v:h,;.t turns out to be about 620
million bushels, the world disappearance in 1937-38 would be about 3,790
million bushels, compared with the 'average of the preceding 10 years of
3,775 million, or about 15 million bushels more than average. However, the
increase in the apparent disappearance in the United States last year (the
result of heavy wheat ftecin- because of short feed grain supplies early in
the season) was about equal to this reduction, and indicates not much change
in disappearance in other countries.

Some increase in world wheat trade in 1933-39 probable

Although total world production is materially 1-rger than last year,
distribution of the crop is such that importing countries will probably take
more wheat than last year. Based on a tentative estimate of carry-over in
European importing countries and on present crop prospects it would appear
that European imports in 19.38-39 might be increased by 25 to 50 million
bushels. Abnormal purchases, such as for reserve stocks, would increase
this indication. Present prospects would seem to justify an increase of 5
to 10 million bu3hels in imports by non-Europoan countries in 1938-39.

The estimate of net world imports for the year ended June 30, 1938,
(total net imports into Eurooean deficit countries plus shipments to non-
European countries) are estimated at 494 million bushels.

Wheat from the United States, however, will meet greater competition
in foreign markets., .nd exports --ril be less than in 1,'.7-38 unless the
Federal Gov.. rnm-nt t .kes steps to stimulate exports. Larger crops are in
prospect this ye-r in European exporting countries, Canada and Argentina.


* Excluding Soviet Russia and China.
S/ Some new wheat included in United States stocks; discussion on page 25.


WS-22





TJS-22


- 20 -


In Canada, production is indicated to be the largest in 6 years,
but the fixing of prices by the Government is not expected to interfere
with exports. Accompanying tbc r.rice announcement of August 4 the
Mlinistrr of Trade und Cornrcrce s.tatc,: "The milling and grain trades of
the world are advised that, not'-rithstanding the internal initial price
of 80 cents per bushel, the Can-adian !Wheakt Board will continue its work
of encouraging the use of Canadian wheat, which will at all times be
competitive on the world's mark,.ts."

On the basis of current pr -duction estimates, the United States,
Canada, Ar-cntina, Australia and -. ei exporting countries of Europe will
have about 900 million bushels in oxcrs of domestic disappearance and
minimum carry-over. Exports from oth. r countries, including Soviet Russia
and India, would incrEaseo this arount.

With exportable surpluses of over 900 million bushels in prospect,
imports of only between 525 and 550 million bushels would result in an
increase of around 400 million bushels in the world carry-over in July 1939.
Revisions in -stin':Ltes, of course, would probably change these figures. If
400 million bushes ,ru added' to the tent Itive estimated world stocks July
1, 1938, of ':20 :d;liion buc.hols, thu world carry-over will about equal the
carry-over of 1,u.3 r,.illion bushnls in 1929. The record carry-over,
estimated .it 1,198 mil.lirn bushls, occurred in 1934.

Information on the current mov .mcnt of wheat, together with com-
parisons, a're sh,.-n in tables 12 to 15. Quantities of United States wheat
and flour .:-ports b. countries a-re s --,.r- in tables 9 and 10.

Prices in foreign rmrkcts hsvt continued to decline

;Wh .at prices in foreign m:-rkets, vwhcre not fixed, have continued
downavrrd during tl, past month, influenced by upward revisions in crop esti-
mates ond liberal offerings in Euror,-a.n :imrk2ts.

Table 2.- Prices of imported wheat at Liverpool

: Hrd wh is : Soft wheats
SU.S. : : C'nd : : U.S. Austra-: India
Date : (Gul') : Argen-: Ic. 3 : :(Pacific): lian : choice
(Friday) : o. 2 : tine :Il nitob:t:Russima: White : / :Karachi j
_:Hd.Wint cr :B :russo: 1/ : : : :
: entr CLnits Cents Cents Cents Cents Cents
1938
July 8 : 88.8 100.7 109.4 92.6 87.2 98.0 91.1
15 : 90.2 29.4 110.2 67.9 86.3 97.1 94.0
22 : 91.1 96.3 11S.0 33.8 84.5 96.8 93.8
29 : 89.0 Y9.l 10.9 79.8 82.9 93.6 91.3
Aug. 5 : 87.2 91.7 .j6.? 77.2 81.0 92.5 91.7
12 : 82.2 34.1 7.6 75.4 76.9 87.6 86.8


SEmpire wheat qu.ulifyi:g for Impcri-il Pruference is exempt from duty
[approximating 6 cents per bushel) under Ottawa Agrcem nts of November 1932.





- 21 -


Table 2 shows prices of imported wheat in Liverpool. Prices of United
States Hard Red Winter and White hatsas declined only about 9 cents from July
15 to August 12 while prices of F -sian and Arg.rtine wheat dec'irned 12 and 15
cents, respectively. Canadian whe at declined sharply, going down 23 cents.

The sh--rp drop in Ceaadian prices (28 certs from July 23 to August 20 for
No. 1 Northern Spring) is the result of adjusting from a season when supplies of
good milling wheat were very limited to a season when supplies are plentiful.
The 1937 Canadian wheat crop was so small, and such a relatively srall proportion
of the crop qualified for the better grades, that 9 million bush:lz of milling
wheat were imported from the United States. On the other hand, the 1938 crop in
Canada is r-xp.:cted to be the lr' gest since 1932 and prices have dropped to world
levels.

The CaY.di an Government announced that it would pay O0 cents for No. 1
Northern Spring wheat, 77 cents for No. 2 and 74 cents for T:o. 3, basis Fort
William and Port Arthur. These prices are somewhat below the loan schedule in
the United States but Canadian fnrmers are to receive in addition participating
certificates entitling them to shLi-e in any profits that may result should the
wheat be dis-osed of at prices r.bo're the fixed minimum. United States No. 1
Northern Spring wheat is ordinarily fairly comparable for milling purposes with
No. 3 Manitoba Northern Spring. The loraz rate on No. 1 Northern Spring at
Minneapolis was announced at 79 cents.

THE DOMESTIC W-EAT SITUATION

BACKGROUND.- The carry-over of wheat in the Unit d States for
the 5 years 1924-29 averaged about 115 million bushels. Stocks
which began to accumulate in 1929 reached the record peok of 378
million bushels in 1933. Four small wheat crops, how ver, reduced
stocks on a comparable basis to about 100 million bushels by
July 1, 1937. Domestic disappearance during the 10 years 1528-37
averaged 680 million bushels.

Domestic wheat prices from the spring of 1933 to that of
1937 were unusually high relative to world market prices, be-
cause of four small domestic crops caused l'rIoly by abnormally
low yields per acre. During 1936-37 both world and domestic
prices advanced sharply as a result of increased dem"nd-and the
smallest supplies in recent years.

Early in the 1937-38 season, domestic and foreign wheat
prices rose sharply following reports of serious drm-a. to the
Canadian crop and the threat of rust damage in the United States.
It was thou~'ht possible at that time that world prices might
remain sufficiently above the 1936-37 level to offset the decline
in United States prices to an export basis. However, with an
increase in the estimates of the world crop, prospects of large
shipments from Soviet Russia, a slow Europoan dcaunjd, disturbed
business conditions, and a falling general commodity price level,
'Theat prices in world markets declined.


WS-22





WS-22


-- 22 -


United States ovheat crop 5 percent under 1915 record

A total 1938 wheat crop of 955,989,000 bushels was indicated by August 1
reports on yield per acre of winter v.eheat and condition of spring wheat. This
is slightly larger than the large, crops harvested in 1931 and 1919 but about 5
percent less than the record crop of 1915. Estimated production of all wheat
in 1937 was 873,993,C00 bu.hels, and the 10-year (1927-36) average production
is 752,891,000 bushels. The indicated total crop, as of August 1,is about 1
percent lower than that indicated on July 1 with a decrease in winter wheat near-
ly offset by the increase in prospective spring v:heat production.

The preliminary estimate of winter wheat production is 638,458,000
bushels compared with 685,102,000 harvested in 1937 and the 10-year average of
546,396,000 bushels. The August 1 estimate represents a reduction of about 27
million bushels from July 1 indications.

The average yield per acre is 13.g bushels compared with 14.6 bushels
in 1937 and the 10-year (1927-36) *-ero.e of 14.5. A month ago the indicated
yield was 14.3 bushels. Figu.-es 3 -.nd I sho-v. the seeded acreage, yield, and
production of all vwheat and winter heata, 1919-i933.

Most of the reduction during July 1 occurred in Kansas and Nebraska
although sharp reductions in yield per i.cre also touk place in Minnesota,
Wisconsin and Iowa with slightly lower yields indic..ted for Pennslyvania,
Michigan, Indiana, Missouri, and Oregon. Scab and blight reduced both yields
and quality in parts of Minnesota and Wisconsin. In Ni:,braska, Kansas and Iowa,
rust and hot weather damaged late fields, harvest w-.s delayed by wet weather and
considerable loss resulted from excessive lodging. WeT.ther was unfavorable for
harvesting and threshing in much of the area er.s of the Miississippi River and
north of the Ohio where considerable damage has occurred to wheat in the shock.
Yields in the States in this area, however, are mostly above average.

Production of all spring wheat includingg durum) on August 1 was placed
at 267,531,000 bushels, an increase of 15,544,000 bushels above the July 1
forecast, and 61,037,000 bushels above the 10-year (1927-36) average production.
Last year., 188,891,000 bushels were produced.

Indicated production of Durum wheat increased from 33,376,000 bushels
on July 1 to 41,148,000 bushels on August 1. Indicated yields per mre increased
2 bushels in North Dakota, 3 bushels in South Dakota, and 1.5 bushels in
Minnesota since July 1. In 1937, the production of Durum was 27,791,000 bushels
and the 10-year average is 40,085,000 bushels.

Prospects for other spring wheat held up ojr improved during July in
all of the important vkieat-producing States -.:ith the exception of Idaho, where
a small decline occurred. The production of othEr spring vJheat is indicated to
be 226,383,000 bushels, compared with 215,611,000 indicated a month earlier,
161,100,000 harvested in 1937, and 166,4].0,,00 bushels the 10-year average.





: WS-22 23 -

Improved prospects in Minnesota end th' Deaotas arc l-rgcly the result
of less rust dnmage:than was expected on July 1, when it hc..~e apparent that
rust was more widespread, ; than during either the 1935 or 1937 epidemic. The
crop matured relatiVEly early and July weather -onditions, with rather cool
temperatures during a portion of the month and below normal rainfall were un-
favorable to the rapid development of the rust. Losses from rust damage also
were reduced beca.is-. of the comparatively large re'rc'eng~ e of the .acreage plant-
ed to rust-reoistant varieties.

Grasshopper damage has been cxtonsive in portions of the spring wheat
territory, notably in north central South Dakota a''iri soi.ithern and western
North Dakota. Some grasshopper damage also has .occ rr'd in northeastern
Montana.

The quality of the market receipts of winter wheat in July 193g is below
a year ago (table 8).

United States carry-over largest since 193

Stocks of old wheat in the United States at the beginning of the 1938-39
season on July 1 have been estimated .t 154,072,000 bushels. These stocks compare
with h revised estimate of 83,214,000 bushels of old wheat on hand July 1, 1937.
This year for the first time, old and new wheat was reported separately by
merchant mills, making possible a statement of stocks of old wheat only. New
wheat always has been reported separately for farm, and interior mill and elevator
stocks, and not used in the carry-over estimate.

'Nhen the new wheat in commercial stocks and merchant mills is included,
July 1 stocks total 173,638,000 bushels, the largest since 1934 when they were
274,328,000 bushels. Stocks on July 1 last year, including now wheat in
commercial and merchant 'mills were estimated at 102,889,000 bushels. Figure 1
and the accompanying table show the stocks in the various positions with and with-
out the new wheat included in-co-mmercial and merchant mill stocks.

New wheat was reported in commercial stocks for 1937 as well as 1938,
but was reported only for 1938 in merchant mill stocks. New wheat in merchant
mills and elevators in 1937 were estimated on the bases of: (1) the percentage
of new wheat in total wheat stocks in important winter wheat States in 1938,
and (2) the percentage of new wheat reaching.market centers in 1937 compared with
1938 as represented by commercial stocks.

It is interesting to note.that domestic disappearance rounds to 702
million bushels using either set of stocks figures.

Supplies of all clauses of wheat abundant

Table 4 shows the estimated July 1 carry-over of old wheat, current
crop estimates and estimated prospective utilization, by classes for 1938-39.
The actual utilization by classes will depend, of course, on a number of
factors, two of which are the prices of wheat relative to feed grain prices
and supplies in the various sections of the country, and the relative prices
of the different classes of wheat.






Table 3.- Estimated '.:heat supplies and distribution by classes for 1937-38

: Hard : Soft : Hard : :
Item : Red : Red : Red : Durum : White a Total
____ :Winter .inter :Spring: : :
Carry-over July 1, 1937 (old:i il.Bu.Mil.Bu. Mil.Bu. Mil.Bu. Mil.Bu. Mil.Bu.
wheat)
Farm....................... 7 7 5 1 2 22
Interior nills & elevators: 3 2 2 1 4 12
Commercial................: 1. 1 3 0 1 9
Merchant mills VI .........:_ 2 4 9 1 3 40
Total carry-over........: 37 14 19 3 10 83
Production..................: 375 257 102 29 111 874
Imports 2/................... 1 1
Total supply............ 1 i. 271 122 32 121 958
Exports and shipments 7/....: 72 5 2 22 101
Carry-over June 30, 1938 (old
wheat) ..................:. 60 37 31 5 21 154
Apparent disappears i.ce 4/ 2S0 229 89 27 78 703
. Bureau of Census figure raised to represent all merchant mills and elevators.
Includes stored for others as well as owned whEa;t in merchant mills and elevators.
Excludes 12,500,000 biLsaels estimated as b-ing now wheat. 2/ From reports of
F reign and Domestic Commerce of the United States. Imports include full-duty
wheat, wheat pr:.ing a duty of 10 percent -.d valorem, and flour in terms of wheat.
./ From reports of Foreign and D.mestic C 'imerce of the United States. Exports
include only flour m-:.u from doamstic .-S:t. Shipments are t'o Alaska, Hawaii,
Puerto Rico and Virgir Islands. h4 Balr:.cin& item.

Table 4. Estimatpe" nrospoctive wheat supplies :-nd distribution
'y closses for 1933-39


Ite 3


: Hard Soft
: Red : Red


Carry-over July 1, 195 (old.;'l.Bu. Lil.Bu. Mil.E
wheat )
Farms ...................: 23 19 10
Intericr mills & elevators 9 5 5
Commercial .............. : 8 b 6
Merchant mills 1/........ 20 7 10
Total carry-over.. ....: 60 37 31
Production 2/ ..............: 20 4
Total supply...........: 447 277 215
Prospective utilization.....: 275 210 115
A'vilable for c.-rry-over in-:
surance stocks r-nd :rx rt..,: 172 67 l100
Ij Bureau of Census figure iaisod to represent all
IncludLs stored for others .s well as wheat owned.
2/ August estimate.


Durum : White


Total


lu. Mil.Bu. Mil.Bu. Mil.Bu.

2 5 59
1 12 32
1 1 22
1 3 41
5 21 154
43 102 956
4S 123 1,110
35 65 700

13 58 410


merchant mills and elevators.


:
'
fint -r :Winter : Sprin


- 24 -


WS-22


Hard
R3d





- 25 -


Table 3 shows the estimated supply aund.istribution by classes for
1937-38 with stocks containing only ol wheat. Th.ble 7 shows the analysis
by classes with new wheat in the commercial a.-ild Lr-rchant mill stocks in all
yeprs. Practically all of this new wheat in these two stocks positions is
hard red winter ,,Theat.

Domestic wheat prices have recently strengthened

Domestic wheat prices continued to decline during the past month, in-
fluenced by large prospective domestic and world supplies, but they did not
decline as much as prices in other countries (tables 2 and 5), due at least in
part to the .ctuKi and prospective effect of the loan in reducing marketing.
As prices declined to their low point, marketing fell off sharply. Moreover,
the heavy movement of spring wheat is expected to be of short duration.

Domestic wheat prices have turned up since the middle of the month,
following the -arnouncem'nts of additional'Agricultural Adjustment -paym.'ntz
to growers who cooperate in adjusting acreage and the Federal Government's
interest in stimulating exports.

Market receipts of winter wheat have dropped off earlier than usual.
The relatively large stocks of old 'crop wheat have been materially reduced and
much of the wheat not eligible as collateral already has moved to market. Con-
sequently, the effect of the loan as a price supporting factor should become
more apparent.

Table 6 shows weighted average cash prices by weeks, in important wheat
markets this year compared with last year.

Table 5.- Average closing prices of September 1/wheat futures, specified
markets and dates, 1937 and 1938
: Winnipeg :Liverpool : Buenos : Chicago : Kansas : Minneapolis
Date :: 2/_ : 2/ : Aires : City___ :__
:1937 :1938 :1937 : 1938:1937 :1938 :19371 :19g19 1937 : 1938
:Cents Cents Cents Cents Cents Cents Cents Cents Cents C-nts Cents Cents
Month -:
May :119.5 84.0 130.3 92.3 116.7 77.1 113.4 73.3 121.4 80.9
June :117.3 82.9 125.2 86.6 111.5 76.5 108.4 72.4 120.3 82.6
July :131.9 77.6 140.7 84.4 122.7 71.0 118.7 65.8 136.8 76.4
Week :
ended -:
July 9:138.1 78.8 140.6 84.67122.6 80.8 124.6 72.6. 120.0 67.1 139.6 77.8
16:142.9 78.4 144.1 84.8 124.3 78.8 126.1 72.2 122.1 67.0 141.6 77.8
23:137.6 77.2 141. 844.4 122.9 76.1 121.3 70.1 118.1 65.2 135.7 76.0
30:131.9 76.2*137.0 82.7 122.5 73.4 117.4 68.0 113.2 63.3 130.0 73.2
Aug. 6:126.3 -75.1 130.0 82.5 123.0 72.0 113.9 66.4 107.0 62.2 125.7 71.1
13:128.4 70.8 128.2 79.2 123.1 65.8 112.5 62.8 105.4 58.8 124.0 67.5
High 4/:142.9 78.8 144.1 84.8 124.3 80.8 126.1 72.6 122.1 67.1 141.6 77.8
Low 4/ :126.3 70.8 128.2 79.2 122.5 65.8 112.5 62.. .105.4 58.8 124.0 67.5
1/ Oct. futures for Winnipeg and Liverpool. 2/ Conversions at noon buying rate
of exchange. 3/ Aug. futures. 4 July 9 to August 13, 1938, and corresponding
dates 1937.


WS-22






- 26 -


Table 6.- Weighted average cash price of wheat, specified markets and
dates, 1937 and 1938
:All classes: No. 2 : No. 1 : No. 2 Hard: No. 2 : Western
Date :and grades :Hurd Winter:Dk,.U.Spring:Amber Durum: Red Winter : White
:six markets:Kansas City:;i. .eapolis:Minneapclis: St. Louis :Seattle 1/
:1937 : 1936:1937 : 1958:1937 : 1938:1937 : 1938:1937 : 1938 :1937 : 1938
:Cents Cents Cents Cents Certs Cents Cents Cents Cents Cents Cents Cents


Month -
May :
June :1
July :1
Week ended-
July 9 :1
16 :1
23 :1
30 :1
Aug. 6 :1
13 :1


High 2
Low 27


31.5
23.0
18.7

21.9
23.0
19.7
09.8
06.6
06.6


:123.0
:106.6


82.0 132.0 79.7 146.3 105.3 128.4 88.4 131.9
81.3 120.8 76.7 *45.0 105.0 122.4 90.0 122.3
68.4 122.? 70.0 151.2 87.6 133.0 79.8 122.0


69.6
69.6
67.8
65.9
67.6
67.0


122.2
125.3
122.3
116.9
113.2
111.8


69.4
71.1
70.2
C8.2
67.4
63.7


353.2
;,'3.0
155.2
145.6
139.0
137.4


97.0
97.6
90.4
83.8
80.5
76.4


142.0
133.2
128.8
125.3
137.5
123.5


83.4
83.3
80.2
77.0
72.1
74.2


124.5
124.1
121.9
117.2
113.6
111.2


69.6 125.3 71.1 156.2 97.6 142.0 83.4 124.5
65.9 111.8 63.7 137.4 76.4 123.5 72.1 111.2


I/ Weekly average of daily cash quotations, basis No. 1 sacked.
_/ July 9 to August 13, 1938 and corresponding dates for 1937.


Table 7.- Wheat estimated supply and distribution by classes, average
1929-30 to 1933-34, crcp years 1934-35 to 1938-39
: Average : : : :
Item :1929-30 to: 1934-35: 1935-36: 1936-37: 1937-38: 1938-39
: 19t3-34 : : :::
: Million Million Million Million Million Million


: bushels


Stocks, July 1 1/ .....
Production ............
Imports 2 .............
Supply ..........
Exports and shipments 2/
Carry-over ........
Disappearance 3/ .......

Stocks, July 1 1/ ....
Production .............
Supply ............
Exports and shipments 2/
Carry-over ............
Disappearance 3 ......


317
792
i--


bushels bushels bushels
All wheat
274 148 142
526 626 627
16 34 34


bushels


103
874
1


bushels


174
956
-


: 1,109 816 808 803 978 1,130
: 90 13 7 12 101
: 325 148 142 103 174
: 694 655 659 688 703
Hard Red Winter
: 161 125 68 57 57 77
: 349 208 203 260 375 387
: 510 333 271 317 432 464
52 3 2 3 72
: 167 68 57 57 77
: 291 262 212 257 283


Continued -


WS-22


76.9
74.8
68.9

69.1
69.0
67.7
67.5
66.7
63.5

69.1
63.5


115.8
112.5
110.0

113.8
111.8
107.6
110.0
102.1
101.2

113.8
101.2


77.0
73.7
67.8

69.2
69.4
67.0
65.4
63.9
59.7

69.4
59.7


*
:*
:*





WS-22 27 -

Table 7.- Wheat estimated supply and distribution by classess, average
1929-30 to 1933-34, crop :rars 1934-35 to 1938-39 continued
Average : : : : :
Item :1929-30 to: 1934-35: 1935-36: 1936-37: 1937-38: 1938-39
: 1933-3 : : : :
: -. 1 in I.'.i- ] i million million Million Million
: b'.shels bushe:ls bushels bushels bushels .bushels
: Soft Red Winter
Stocks, July 1 j ....: 32 36 32 27 15 40
Production ............ 185 188 204 207 257 240
Supply ............: 217 224 236 234 272 280


Exports 'and shirpments 2/: 2
Carry-over ...........: 35
Disappearance 3/ ......: 180

Stocks, July 1 7 .....: 79
Pr oduction ............ : 135
Imports 2 .............: -
Supply ..........: 214
Exports and shipments 2/: 1
Carry-over ...........:. 79
Disappearance / ......: 134

Stccks, July 1 1/ *.... 24
Production ...........: 40
Imports 2/ .............:
SuppTy ...........: 64
Exports and shipments 2/: 7
Carry-over .......... : 20
Disappearance 3/ ......: 37

Stocks, July 1 1/ .....: 21
Production ...........: 83
Supply ............ 104
Exports and shipments 2/: 28
Carry-over .............: 224
Disappearance 3/ .......: 52


-- -- -- 5
32 27 15 40
.192 209 219 227
Hard Red Spring
74 27 34 18 31
53 108 51 102 184
9 30 25 1 --
136 165 110 121 215
-- -- -- 2
27 34 18 31
109 131 92 88
Durum
9 5 7 3 5
7 25 9 29 43
7 4 9 -- --
23 34 25 32 48
.- -- -,


30
70
100
10
16
74


.7
27
White
16
86
102
5
17
80


17
100
317
9
10
98


5
27

10
: 111
121
S2,2
-21
78


21
102
123


1/ Includes new wheat in commercial and merchant mill stocks.
2/ From reports of Foreign and Domestic commerce of the United States. Imports
include full-duty wheat, wheat paying a duty of 10 percent ad valprem, and flour
in terms of wheat. Exports include only flour made- from domestic wheat. Ship-
ments are to Alaska, Hawaii, Puerto Rico and the Virgin Islands.
3/ Balancing item.

See also tables 3 and 4 in this issue; also "The Wheat Situation" February 1937
for the figures for 1930-31 and August 1937 for the figures for 1931-32 to
1933-34.


-------


--


--


~





- 2-


Table S.- Quality .of the.1937 and 193g hard red. and soft red winter wheat
(Based on inspected receipts at representative markets July 1
to July 31.)


: Harl Red tnter v.he.t :Soft Red
Sub- : : Sb-
clr : 37 13 193 class :
:Dk. HI. 60 47
:Hard. 40 53 : Red
:Yellow Hd. 0 0
: 1 9
29 30
: 15 34
10 20
4 6


Winter wheat-

1937 : 193S


Sarple
Tough
Light Smutty
SrCtty
Light Garlicky:
Garlicky


Table 9.-


United States .onestic exports of wheat by
seni-anrnually beinnrinr July 1935


specified countries,


Count


Belgium .
Denmark ,,
France .
Germany ,,
Greece..,
Ireland ..
Italy .,,
Nethorland
Norway ...
United Kin
Other Euro
Total EiTro
Canada ...
Mexico ..,
Panama ...
Salvador
Brazil ...
Colombia .
Peru .....
Japan ....
Other coun
%tal exp


: 1935-36 : 1936-37: 1937-38
S :July-Dc.: Jan.-Juno: July-Dec.: Jnr..-Juno: July-Dec: J a.-TJune
: 1,000 1,000 : 11,000 ,000 : 1,000 1,000
:bushels bushels :b- shols bushels :bushels bushels
.. : 59 11 : 19 191 : 5,15 6,4o0
..... : 44 1,5
..., : 31 : 35 65 523 445
.,..: 315 644
.., : 320 1,$51
.: : 399 :3,253 ,.387
.... : 204 39 : 410 640
s ...: : 336 36 : 5,639 5,208
..... 149 466
-dom. : 197 2 : 5,432 15,903
pe ..0 0 : 11 2 : 539 2,133
pe'.. : 59 42 : 1,201 1,167 : 22,544 43,665
,,.. : 13 20 : 34 I0O : 5,425 3,949
,. : 4 24 : 1 : 995 2,275
.... 252 26 1
....: 61 37 70 69 114 66
..., : 35b 2/
9 9 : 2 : J/ 1 56 193
.... : : 5 7 0
.... 133 42 0
tries : 20 23 : 35 1 : 525 185
orts 165 146 : 1,733 1,436 : 30,930 50,334


Commerce.


Grade


l/ Preliminary. 2/ Less than 500 bushels.
Compiled from official records of the Bureau of Foreign and Domestic


WS-22





- 29 -


Table 10.- United States exports of wheat flour, made wholly from
United States wheat, to specified countries, seri-an;nully,
beginning July 1935


Commodity
and
country


Wheat flour :
Netherlarnds ..,.,,:
Norway .... .....
United Kingdom....:
Costa Rica .......:
Guatecola ,,,,...:
Nicaragua ........
Pnna-a .......... :
Salvador .,....:
Mexico .........
CDba .............:
Haiti, Roepublic of:
Ecuador ........ .:
Venezuela V,,,,,,
China ...........:
Hong Kong ........:
Philippine Islands:
Other countries ..:

Total .........:


. 1935-. : 1936217 :
: July- : Jan.- : July- : Jan.- :
: Dec. : June : Dec. June :
: 1,000 1,000 1,000 1,000
: barrels barrels barrels barrels


9
3/
28
7
34
22
26
6
6
95


4
3
20
124
32


429


18
126
34


4oo


14
238
47


578


lo6

21
14
33
18
24
11
8
102
11
26
4
10
20
233
79


720


1937-38
July- : Jan.-
Dec. : July 1/
1,000 1,000
barrels barrels


248
24
70
22
53
15
37
15
13
207
18
65
32
8
164
294
252


1,537


240
40
123
41
44
10
40
11
3
303
22
o0
66
81
98
429
311


1,942


Preliminary.
To convert to wheat
Less thano 500.


equivalent multiply by 4.7.


Compiled front official records of the Bureau of Foreign and Domestic Connerce,


Table 11,- Durun wheat: Production in specified countries,
average 1932-1936, annual 1935-1938


: Average :
:Iq2-1qZ6:


: 1,000
: bushels


58,984
22,906
17,045
8,745


1935


1936


1,000 1,000
bushel s Iushels


55,850
24,453
13,885
11,023


57,352
18,651
8,488
4,409


1937 :


1,000
bushels

75,001
22,509
12, 702
10,288


107,680


105,211 gg,900. 120,500


Paris office, Bureau of Agricultural Economics.


WS-22


Coun try


Italy ..
Algeria
Morocco
Tunisia


....

* ..
;,,o
,


... 9
... .
* *0.


1938


1,000
bu:helo

73,486
22,046
16,755
7,349


119,636


---


...... ml I


-


:lq2_16


`----~-~'--~~I-------"`


_ L--L---S ~C


Total .......:





- 30 -


Table 12.- Movement of whent, including flour, from principal
exporting countries, 1934-35 to 1937-38


: Export_._ v" 1.3n by official sources__
: Total : ;~ljT 1 to date shown : Date
l: 934-35 : 195.-3 6 : 16-37:193~5 136-37: 1937-38
: 1,000000 01,000 1,000 1,000 1,000


bushelss


buL" ".E busGlals


bushels bushels bushels- --


United States 1/...: 21,532 15 '29 21,584
Canada.............. 19,630 237, 47 213,028
Argentina........... 7,000 7,577 12,977
Australia..... .:108,009 10, -3 98,730
Russia..............: 4,286 2-,. -0' 4,479
Hungary.............: 12,499 14,t"44 27,428
Yugoslcvia.......... : 4,401 728 17,954
Rumania............. 3,432 6,391 35,540
Bulgaria............: 375 988 7,273
British Indic.......: 2j31S 2,556 14. _74
Total........... :513,_80 4987222 599,]3


15,929
237,447
76,577
96,44o
29,342
11,943
174
5,595
954
1.375


21,584
213,028
162,977
85,964
3,973
26,658
17,322
35,534
6,543
11.091


104,748 June 30
94,546 June 30
69,670 June 30
.111,798 May 31
40,593 May 31
8,917 May 31
5,003 May 31
31,969 May 31
7,222 May 31
6.810 May 31


___ _Shipments as given by trade sources
Tt^.l :_ W:ek ended 1938 : July 1-July 30
1]36-.37 : 137-38 :Julv 30: Aug. 6: Aug. 13: 1937 : 1938


: 1,000 1,


: buohls


North America 2/....: 231,832
Canada,4 markets 3/.: 194,531
United States 4/....: 10,395
Argentina....... ... : .164,678
Australia...........: 105,836
Russia........... : .8
Danube & Bulgaria 5/: 65,544
British India.......:6/14,674
Total / ........: 582,652
Total European ship-:
ments 2/........ ..: 44,670
Total ex-European :
shipments 2/..... : 127,192


i .6


bu sh- is

184,720
86,595
83,651
66,898
123,1814
42,248
37,320
15,714


2 ,000
bushels


3,808
1,807
2,392
1,120
1, 88
1,304
0
960


1,000
bushels


4,288
2,825
1,842
1,116
2,608
2,784
0
896


1,000 1,000
bushbls bushels


4,195
1,389
2,534
1,029
2,100
3,512
312
736


15,112
7,995
5,425
4,932
8,968
184
2,432
4,120


1,000
bushels

25,147
8,994
13,330
8,689
12,792
10,216
864
4,448


475,oc044 35,748 62,156

397,656 6,856 s/1 9, 040o/30.2P4


q99,4oo


2,120


8/ 5,976 8/9.688


SIncludes flour milled in bond from foreign wheat.
Broomhall's Corn Tr.de News.
Fort William, Port Arthur, Vancouver, Prince Rupert, and New W stminster.
SOfficial reports received from 16 principle ports only.
Black Sea shirmecnts only.
Official.
STotal of trade figures includes North America as reported by Broomhall's but
does not include items 2 and 3.
8/ To July 30, only.


Country


....... IIII


-Y -- ---


.73-22


:*
:







31 -

Table 13.- Exports of wheat and wheat flour from the United States,
1936-37 and 1937-38
(Includes flour milled in bond from foreign wheat).


Period


July-June
Week ended
JulyI

.23 .
30 .
Aug. 6 .
13.


: __ Wheat : Whoat flour :Wheat incl. flour
: 1936-37 :_i1937-:=3 :1936-37 : 1937-38 : 1936-37 : 1937-38
1,000 1,000 1,000 1,000 1,000 1,000
: 'u-she lcs bushels bushels bushels bushels bushels
: 3,168 81,264 3,918 4,997 21,584 lo4,74g
.-I : 1937 1938 1937 1938 1937 1938
.51 1,43. 39 50 214 1,667
*;. 18,1l4 1 62 165. 1,405
9: 97 3,329 34 33 1,131 .. 3,484
S: 757 2,171 26 47 879 2,392
... : 758 1,673 45 36 970 1,842
.... : 1,424 2/ 2,196 40 2/ 72 1,672 2/ 2,534


_ Data for totnl exports from the United States by weeks are not available.
These data ore the total of exports through 16 of the principal ports.
2J Preliminary.
Compiled from reports of the Department of Commerce.

Table 14.- Shipments of '-heat, including flour from principal
exporting countries, specified dates, 1936-37 and 1937-38

P: Ar-L vina A.ustra~ -.?. Dranube : North America
:1936-37:1937- :1936-37:1937-38:1936-37 1937-38:1936-37:1937-38
:.1,000: 1,000 1,000 1,000 1,000 1,000 1,000 1,000
:brhels "bushels bbushels ushels buchelE bushels bushels bushels
July-June :164,678 66,928 105,836 127,520 65,544 37,320 231,832 184,720


Week ended-.
July 9 ..
16.
23 ..
30
Aug. 6 ..
13..


1937'
1,412
672
14
920
838
876


1938 1937


2,700
1,508
1,216
1,120
1,ll2
1,029


2,052
1,124
1,160
1,348
1,812
1,472


1938 1937
3,272 808
1,124 120
2,100 208
1,588 240
2,608 472
2,100 584


Compiled from Broomhall's Corn Trade -ie',s.


WS-22


1938
224
264
664
0
312
312


1937
1,440
2,488
3,312
2,800
2,512
2,560


1938
3,776
2,976
6,104
3,808
4,288
4,195








32 -


Table 15.-Net imports of wh at, including flour, into European countries,
year beginning 2 Al.y 1, 1.936-37 and 1937-38


Net imports reported


Country


: 196-37 : 1937-38
: : forecast
: Mil. bu. Mil. bu.


Austria ........*.......: 10 7
Belgium .................: 40 37
Czechoslovakia ..........: 1/ -11 1/ 1
Denmark ..................: 7 7
Finland .................. 4 3
France ........... ......: ? 16
Germany ...............,..: 23 47
Greece ...... ............: 2'. 16
Ireland ......... ..... .: 14 14
Italy ..................: 54 5
Latvia ................... : 1 1
Netherlands .............: 21 24
Norway ..................: 9 7
Poland .................: 1/ 6 0
Portugal .................. : 3/ 1
Sweden ..................: 3/ 1/ 1
Switzerland .............: 19 14
United Kingdom ........... 199 193
Total imports of above. : 429 392


: July
: to


June
May
June
SJune
SJune
June
:June
SApr.
June
SJune
SJune
SJune
SJune
SJnoe
: Apr.
SJune
SJune
: June


1 :




31
: Mi:


30 :
31 :
30
30
30
30
30
30
30
30
30
30 :
30
30 : 1/

30
30
30


936-37
1. bu.

10
36
-11
7
4
7
23
18
14
54
1
21
9
6
3/
T/
19
199


1937-38
:


Mil. bu.

7
34
1/-1
7
3
16
47
14
14
5
1
24
7
2/

1/ 1
14
193


Spain ................. :
Total imports .........:
Total exports .........:
Total net imports .....:


6 3
435 395
17 2
418 393


422
17
405


/ Net exports.
2/ 1et exports of less than 500,000 bushels.
5/ Less than 500,000 bushels.


Compiled from official sources except as otherwise stated.


WS-23l


386
2
384


'


-





WS-22


- 33 -


OUTLOOK FOR THE 1939 RYE CROP

BACKGROUND During the past 10 years rye acreage harvested
has remained above the pre-war level, but has been below the
high level reached at the close of the War (fig. 9). The in-
crease in rye production during the War period was due largely
to an expansion of rye acreage into the sub-humid area of the
spring heat Belt. Since 1924 yields have been generally below
the average for the years 1910-15 and acreage abandonment some-
what larger. In 1933, 1934 and 1936, droughts greatly reduced
rye yields, caused heavy abandonment and reduced supplies below
domestic disappearance. With more favorable growing seasons in
1935 and 1937 yields and production were much above the 10-year'
average.

With rye prices J/ only a little more than half of what they were in 1937
and feed supplies ample, growers will probably reduce their rye acreage from
that of this year, when it is estimated that 3,914,000 acres were harvested. For
the 5 years, 1928-32, the harvested acreage averaged 3,315,000 acres (fig.9).
It is not probable, however, that the acreage next year will decline to this
average. An average acreage, with average (1913-37) yields of 12.0 bushels
would produce a crop of about 40 million bushels, which would take care of
domestic needs. With average yields on an acreage larger than average, the
excess of supply over disappearance would be increased, unless prices and sup-
plies of rye relative to other feed grains induced increased feeding. While
average yields have been used in these computations, it is well to recognize
variations in yields which are very important in determining production (fig.9).

Table 16 shows the supply and distribution of rye during the past 3
years 8/. Disappearance in 1937-38 was apparently about 42 million bushels.
This is probably somewhat larger than may be expected in 1939-40 unless feed
grain supplies are small, as in late 1936 and before corn was harvested in
1937. Domestic disappearance appears to be consisting of about 8 million
bushels for seed, 7 to 10 million bushels for distilling, 8 to l1 million
bushels for flour and 10 to 20 million bushels for feed.

Rye supplies in 1938-39, estimated at 62,300,000 bushels are 10 million
bushels or more in excess of usual domestic disappearance. These supplies may
result in a large carry-over at the beginning of the 1939 *erop year because
export prospects are less favorable and there are ample supplies of feed grains
on hand. Net exports of rye from the United States in 1937-38 totaled about 4
million bushels. These largely replaced exports from Poland, which country
had a very small crop in 1937.




7/ Statement on rye prices in "The Wheat Situation," July 23, 1935, page 20,
last sentence, referred to No. 2 Rye at Minneapolis.
S8/ Estimated farm stocks available only for 3 years.





WS-22


Present prospects are for a European rye crop of around 905 million
bushels, according to the Berlin office of the Bureau of Agricultural Economics.
This would indicate an increase of about 10 percent compared with last year,
and would provide significant quantities available for export, especially in
Poland and the Danube Basin. (Table 17 shows the relative importance of the
various exporting countries.) Poland has the best combined wheat and rye pros-
pects since the record crops of 19533 On the basis of present prospects the
rye crop is estimated to be around 200 million bushels compared with 222 million
in 1937. In Germany, although acreage is about 6 percent below average, a yield
of about 303 million bushels is in prospect. This is the largest crop since
1933. The yield in Czechoslovakia, estimated at 65 million bushels, is well
above that of the past 2 years. Heavy rains recently are reported to have
caused considerable lodging. This. together with a reported shortage of farm
labor, may cause harvesting difficulties.


Table 16.- Rye:
United


Supply and distribution,
States, 1935-38


Item : 1935-36 : 1936-37 : 1937-38 : 1938-39

: 1,000 1,000 1,000 1,000
: bushLls bushels bushels bushels

Stocks July.l l/........: 11,283 22,299 5,886 9,800
Production ................: 58,597 23,319 49,449 2/ 52,500
Net imports ...............: 2,257 3,694 --
Total supply .........: 72,137 49,312 55,335 62,300

Net exports ...............: --- 3,943
Stocks June 30 1/........: 22,299 5,886 9,800
Apparent disappearance: 49,838 43,426 41,592


1/ Includes stocks on farms as of June 1 (available only beginning with 1935
and only for June 1) plus commercial stocks as of July 1.
2/ Preliminary.










RYE: ACREAGE. YIELD PER ACRE. PRODUCTION. NET EXPORTS OR IMPORTS,
AND PRICE RECEIVED BY FARMERS. UNITED STATES. 1900-193B
ACRES I I
(MILLIOn I ACREAGE HARVESTED



6 ------ ------









Is


5

o
BUSHELS .......-- -TA I IE



susE -- ---
,ll'O"l s PRODUCTION NEI EXPORTS OR IMPORTS

I I-
i oi Netoexprts
100aE Net imports

AI n


50-- -- --



CENTS
PER FARM PRICE'
BUSHEL

too
100 ----

50

1900 1905 1910 1915 1920 1925 1930 1935 1940
YEAR BEGINNING JULY
*PRELIMINARY *too-. 0or,. DEC. I FAr M PRICE NI


Figure 9

During the past 10 years rye acreage ha remained above tlh pre-
war level, but has been below the high level reached at the 'close of the
war. Since 1924 yields have been generally below the average for the
years 1910-15 and acreage abandonment sonmwhat larger. In 1933, 1934,
anm 1936 droughts greatly reduced rye yields, caused heavy abandonment
and reduced supplies below domestic requirements. With more favorable
growing seasons in 1935, 1937 and 193, yields and production were much
above the 10-year average.


Rye: Acreage, yield per aore, production, net exports or imports,
and price received by farmers, United Statea, 1900-38


Year
begidi
Jul1


1900
1901
1902
1903
1904
1905
1906
1907

1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
In ;5
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
i0ai


S Aoreage
s harvested
S":'1l000 aores

2,127
2,4(19
: 2,444
2,260
: 2,205
: 2,297
: ,154
: 2,073
: 2,130
: 2,212
: 2,262
: 2,452
2,724
S3,089
3,144
3,417
: 3.
S5,059
: 6,694
7,168
S4,825
: 4,851
: 6,757
: 4,936
3,941

: 3.419
: 3,458
3,310
3,130
S3,621
3,162


2,035
1 1
2: 774
*: 3.839
/: 3,911


-- -a


I
I"
t


Yield
per aore
Bushels

12.9
12.8
13.9
12.8
12.9
13.6
13.7
13.6
13.5
13.6
12.9
12.8
13.9
13.1
13.4
13.7
12.2
11.9
12.5
11.0
12.8
12.6
14.9
11.3
14.8
11.1
10.2
14.8
11.5
11.3
12. -
10.6
11.5


14.2
9.1
12.9
13.14


I N et s Price
a Production Bort. I received by
Prdu n epos Y/ I farmers 2/
1,000 bushels 1,000 bushels Cents per buE


27,413
30.773
33,8"6o
28,932
28,461
31,173
29,609
28,247
28,650
30,083
29,098
31,396
37,911
40,390
42,120
46,752
43,089
60. 21
83,421
735,69
61,915
61,023
100,986
55,61
445
42,316
34,860
51,076
37,910
35,232
45,068
33,378
39.4 2
21,418
17,070
58.597
25,319
49,449
52s.SO


2,345
2,712
5,444
751
9
1,387
769
2,443
1,295
212
S-187
/-10
1,854
2.236
12,880
14,684
13,275
16,352
,35829
40454
46,885
29.244
51,564
19,900


21,697
26.345
9,487
2,599
139
908
304

31-11. 49
3/- 2.257
I/- 3,694
3,943


51.2
55.7
50.8
54.5
68.8
61.1
58.9
A:,5
74.6
73.4
81.0
68.7
62.9
83.3
85.0
113.0
176.4
15-.1

146.4
84.0
63.9
59.3
95.2

83.0
83.5
83.6
827

25.1
62.7
71.S
39.5
80.5


1/ From reports of Ibreign and Domestic Coamerce of the United States. Includes
flour. ~/ December 1 farm price, 1900-1907. 3/ Nt imports. 4/ Preliminary.


I I


L;I2Y





WS-22 36 -


Table 17,- International trade in rye, including flour, by important
countries, averrg. 1.925-26 to 0929-30, 1930-31 to
1934-35, anr-." 1935-6, J196-37 and
Jaly .-'ceTrVr 197


Country


Principal export- :
ing countries
United States....:
Soviet Russia....:
Hungary...........:
Canada............:
Argentina........:
Poland ..........:
Germany .........:
Principal import- :
ing countries
Denmark .........:
Norway .......... :
Finland .........:
Austria .........:
Netherlands .....:
Czechoslovakia ..:
Latvia ..........:
Sweden ..........:
Estonia .........:
Belgium .........:


: Year beginning July
: Av.1925-2b:Av. 1930-31: : 196 : 1937
: to 1929-30:to 1934-35 1935-36 9337 :(Jly-Dec.)
: Net : Y-t : Net : Net : Net : Net : Net : Net : Net : Net
Sex- : e'- : ex- : im-- : ex- :m ex- : im- : ex- : im-
:ports:pct sports :ports :ports:ports :ports :ports :ports ports
:Mil Mil. Mil. Mi".- Mil. Mil. Mil. Mil. Mil. Mil.
:bush. bush. bush. bu >, bush. bush. bush. bush. bush. bush.


14.6
7.4
6.6
6.2
4.5
4.1
1.7


7.7
7.0
6.2
4.5
4.0
3.7
3.2
2.5
2.2
1.6


17.
L4
3.5
6.1
16.4









0.6

0..1


2.8
0.3
2.0
4.2
18.4
3.5


9,g
5.4
2.2
2.4
7.4
1.3
3.6
0o1 1.6
0.2
5.3


2.3





0.0


6.9
5.9
2.9
1.S
3.0
0.1


4,2
4.9
4.1
6.3
15.6







1.1
0.1
0.7


3.7 4.0
6.9
1.0
0.5
0.1
0.2
3.9


6.9
5-5
2.6
6.5


0.4

0.0


0.3
0.3
2.8


5.7


3.5


2.6
2.2
0.8
4.5

2.2

0,0
0.5
1.5





TS-22


Table 18.- Rye: Production in specified
countries, 1935-38


Country : 1935 : 1936 : 1937 1938

: 1,000 bushels 1,000 bushels 1,000 bushels 1,000 bushels
United States ....: 58,597 25,319 49,449 52.500
Canada /I ........: 7,795 3,042 4,579 9,516
Total (2) : 66,392 28,361 54,028 62,016

Bulgaria ..........: 7,767 8,188 9,3s7 8,822
Czechoslovakia ....: 64,501 56,548 58,446 2/ 65,000
Germany .......... 294,399 290,793 272,296 2/303,100
Hungary ...........: 28,650 28,114 24,325 31,503
Latvia .1 ,.......: 14,180 11,145 15,668 14,369
Luxemburg .........: 452 449 392 402
Netherlands ......: 18,311 18,736 18,928 20,668
Poland ............: 260,498 250,536 221,949 2/259,800
Switzerland .......: 1,295 1,077 1,296 1,303
Yugoslavia ........: 7,719 8,002 8,239 9,055
Total (10) : 697,772 673,588 630,926 714,022


1 Winter wheat, only.
SEstimate of the Berlin office


of the Bureau of Agricultural Economics.


- 37 -





WS-22. 38 -

THE FLAXSEED SITUATION

BACKGRIUND.- Prior to 1908 the Uhited States production of
flaxseed was generally in excess of domestic requirements,
but since that time we have shifted from an export to an im-
port basis. From 1910 to 1920, domestic flaxseed supplied
more than one-half of our domestic requirements; from 1920 to
1929 between one-fourth and one-half. Production since 1928
has been greatly reduced, as a result of low yields and re-
duced acreage. 'Domestic demand for flaxseed was at a low
level during 1931 and 1932, but in the past few years it has
improved materially. Prices of flaxseed have improved sub-
stantially from the low level reached in 1932, and in the
past 2 years have been at the highest level since 1929-30.

Supplies of Flaxseed

Foreign supplies.- The world production of flaxseed in 1937-38 is now
estimated at around 135 million bushels, or about 12 million bushels under the
estimated harvest of 1936-37. I.ost of the decrease this year is due to a re-
duction in the size of the Arg!-ltine crop which was harvested early in 1938.
This' crop was only.about 61 million bushels as compared with 76 million in
1936-37. Since Argentina furnishes by far the largest percentage of the com-
mercial world supplies of flaxseed, the world level of flaxseed prices is
dependent largely on supplies in the Argentine, together with the general
world demand situation. Little inforLiction is yet available on the prospects
for the 1938-39 Argentine crop to be harvested late this year and early in
1939, but such information as is available indicates that a somewhat larger
crop is in prospect than was harvested during the past year. Weather con-
ditions have been f:7orable for seeding and early growth of the crop, and
some increase in ac3oage appears probable. Production in 1938-39 in other
countries so far reported is above that of 1937-38, and it now appears
probable that total world flaxseed production this coming year may be some-
what larger than in 1937-38.

Domestic supplies.- On the basis of August 1 indications, the 1938
United States flaxseed crop will be about 8,185,000 bushels compared with
6,974,000 bushels last year. The carry-over on July 1 has been estimated
at 2,199,000 bushels, making a total domestic supply of about 10,400,000
bushels, which, with the exception of 1935-36, is the largest supply since
1932-33. The indicated yield for 1938 is 8.2 bushels per acre, which compares
with 7.5 last 'ear and 6.0 bushels per acre for the period 1927-36. While
the 1938 indicated crop is generally larger than in any of the past few years
except 1935, it is much less than one-half of the production during the years
1924 to 1928.

Although domestic requirements of flaxseed may be somewhat less during
the 1938-39 marketing year than in the past 2 years, they are expected to be
considerably larger than domestic supplies, and the total utilization of
flaxseed may be again made up of more than one-half foreign flaxseed. In the
marketing year 1936-37, domestic production was only large enough to supply





- 39 -


about one-sixth of our requirements, and in 1937-38 about one-f-urth of our
requirements. Since the beginning of 1938, imports of flaxseed have been much
smaller than during the greater part of 1937. During the period April through
June, imports totaled 2,663,000 bush'nls compared with 8,604,000 bushels in
the samo period of 1937. Total imports for the crop year 1937-38, beginning
July 1, amounted to 17,860,000 bushels compared with 26,096,000 bushels in
1936-37.

Demand for Flanseed

The demand for flaxseed products was unusually favorable during the
greater part of 1936-37 as a result of the increased volume of building activity
and a shortage of high protein feeds as a result of the drought. Since late
in 1937, demand has fallen off materially and the rate of flaxseed crushing
has made a comparable decline. In the past 2 or 3 months some upturn in total
consumption of linseed oil has occurred, and some further improvement is
anticipated for the next few months, in view of recent improvement in the out-
look for private building, together with the Government's steps to increase
residential building. According to reports of the National Lumber Manufactur-
ers' Association, orders of new lumber by mills during the week ended July 16
reached the highest point since April 1937.

The total value of building permits in 215 cities for the first half of
1938 amounted to about $528,000,000 compared with $596,000,000 in the first
6 months of 1937 and $464,000,000 in the sam-i period of 1936. The Federal
Reserve Board index of the total value of building contracts awarded declined
from a high level of 67 percent of the 1923-25 average in July 1937 to 46 per-
cent of this same average for March 1938. Since March this index has increased,
and the average figure for June was 54 percent.

Prices of Flaxseed

Prices of both domestic and foreign flaxseed have declined considerably
during the past year. The price of No. 1 flaxseed at Minneapolis has dropped
about 35 cents per bushel since the first of the year, and for the week ended
July 30 averaged $1.80. At Buenos Aires the price has declined somewhat less
than in this country so far this year, and the margin has become narrower.
During most of February the margin between prices at Minn.minnolis and at
Buenos Aires was about 80 cents per bushel, whereas this margin for the week
ended July 30 was only about 61 cents per bushel, or 4 cents below the im-
port duty of 65 cents per bushel on flaxseed. The weakness in flaxseed prices
during the first half of this year 'has n.rparently been due largely to the
less favorable denmnd situation, both domestic and foreign.

Although flaxseed prices have been relatively high as compared with
wheat prices, the total returns from flaxseed have been low in a number of the
years since 1930, as a result of low yields. On the basis of present yield
figures and prices of flaxseed ar.d wheat, however, it appears that farmers
will receive considerably larger returns this year per acre of flaxseed than
per acre of wheat. While flaxseed prices during the next few months will
probably be slightly below the general level of prices a year ago, they are
expected to continue well above prices during the years 1930-35.


WS-22




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