THE BREADSTUFFS AND PRODUCE MARKETS.

Otago Witness, Issue 2809, 15 January 1908, Page 8

THE BREADSTUFFS AND PRODUCE MARKETS.

Frijar. Sufficient .time has now. elapsed since tha j holidays for the wheat markets to resume j their normal course, and to-morrow's cable j from London will* be eagerly awaifed. Statistically Vh.e position is stronger than ever, especially in view of the unfavourable ( i news from India and the extreme impro- j bability of supplies being available from , that source to meet European require- ' ments. The lowering of the bank rate and the consequent easing of financial conditions in London is also calculated to have a firming effect upon the market, and indications point to a_ gradual firming in prices. Just before Christmas the sale of 12,000 quarters January-February shipment was reported at 38s 9d, and yesterday the first sale of the year was cabled — viz., 14,000 1 quarters Australian January-February shipment at 4-ls 3d, or a recovery of 2s 6d per bushel. A further advance of another 2s 6d - 1 per quarter would brinsr the London market up to the point' it touched before prices were disorganised by the American money panio, and it is quite* on the cards that | "this may be a-ccomplished ere many weeks | are past This assumption is fully borne I out in the following * review of the sifcua- | tion by "Beerbohm" bearing 1 date London, | November 29: — I The trade still suffers from the apathy born I of ii 7 per cent, bank rate, but continues to | exhibit undoubted signs of strength on the slighitest encouragement from America, or the merest rumour of unfavourable weather in Argentina. So far th© Argentine crop promises well, but it must be borne in mind ! that nearly half the crop is still subject to ! weather influences. The Ministry of Agriculture has this week been credited wiih eati- ■ mating the probable surplus at 18J million quarters, or aver 5,000,000 quarters more than in the past year, and this notwithstanding thait the area sown is only 1 167,000 acres greater than lest year. Commercial estimates, however, "are more reliable, as we know from past years' experience, and these range* between 20 and 22 million quarters, against 19 £ million quarters last year. If' tbe total should reach 22 millions, which we suggest' ia ithe maximum, there would be » surplus available for export of 155 million quarters, of which it is possible to ooncedve that 80 per cent, might be exported in £be' firs* six months of next year, which would afford, a weekly average of •475 > 000 quarter*}, as compared with 390,000 quarters from Jaruaory to

Tune this year (hitherto ■ the largest on record), 300,000 quarters in 1906, and 320,000 quarters in 1905. Price's must be very attractive to the Argentine glower, and the whoa* ■will be greatly needed in Europe, so that ifr ■is quite probaible, if all go well with the crop, that tihe exports from Argentina from January 1 to June 30, 1908, anay- be tihe largest, on record. In the past year 76 per; . cen<t. of fehe total surplus was exported in the first 'half of the yew; in 1906 the proportion was 70 per cent., and in 191)5 aboutf 65 per cent. It is quite^ agreed that rauchv will depend upon the future sirjypLGas front this country, bui we are prepared to believe that still more depends upon the future, supplies from America and Canada, which may experience a very sudden % and serioua falling off after next month. It is, wa think, quite obvious Shat under the tbttraotion oS high, prices and under the pressure of finarboiall troubles, America has for some time beeni doing her utmost in the matter of exports.. The total aooount of waeait and flour shipnedt from the United States in the five months* ended November 30 will, in fact, reach abouti 75 million bushels, which represents a ■weekly total of 435,000 quarters, or 22,750,000 quartern per annum. Now it may 'be assumed* we suggest, that if the last American crop did not exceed 625 million bushels, as is officially declared, the total export surplus this season, including 50 million bushels of old crop, would not exceed 125 million bushels; in such a case there would remain >only__so million bushels for export during the remaining' seven raon'ths of the season, . or- sufficient 'to provide about 200,000 quartern per week of exports to all destinations. This .may seem a somewhat extraordinary deduction ; but Una . is an extraordinary season-, especially for America: For the', past ythrea ' years the crops and exports have been, as follows from the United States (ir£ bushels. 000 omitted):— ' Exports Exports July ito 12 month* Crop. Niov. 30. to June 30, 1907-08 .. 625,000 "75,000 ? , 1906-07 .. 785,000 - 69,000 148,000 1905-06 .. 690,000 36,750 98,000 This comparison shows dearly with what haste America has been disposing of hen ! surplus this season. The conditions nmsti ; be much the same in Canada, to whose: farmers present prices 'are the highest they) have yet experienced. Here- we are now told tbaii the crop is 25 per cent, less than last year, ; and yet Canada has 'been exporting lately afc '• a. greater rate tiha-n perhaps evez before. From) ; Russia and Roumania - the exports ior . this season, as will be seen by the tabular statement given elsewhere, axe 30 per. cent. . less than last year, and^oyer 50 per cent, -less .. than in 1905. It is difficult to suggest that these countries have been holding wheat back . for high prices, because the prices obtainable have been, already abnormally and. attractively high to the , Russian growers. * v These brief leraiorks about our principal sources of supply s>how, we think, tS»B although Argentina may be credited with at possible 475.000 quaufcers per week during 1 the first half -'of the next year, it is very douibtful whether the remaining countries will, together, ba able to make up a total which shall be equal to the European requirements. These requirements will Jbet comp-araifciveLy larger during the "remaining: eight months of the seasons than the ' actoaß " imports into Europe during file past four months have been,' because these- imports', especially "in Germany, Italy, and Spain have been far below the rate of the seaswnte total estimated requirements. It is a mistake, we suggest, to assume that 'because Europe has in the past four month's imponted ait the rate of rather less than 6qr million quarters 'per annum, tEa/t this rate will satisfy the remainder of the- season. - in, is, on the contrary, quite conceivable fchafl high prices- and a difficult money market may have restricted 1 provisioning for future: requrpsmieirfe to the lowest possible point. - Thdfl is obviously the case in Germany, andl is evideautly tap in Italy and Sp*in, whose imports so- fax 'this season have been remark-ably-srrralL The Commonwealth markets have also recovered somewhat, partly owinjf to the. firming in London and partly to the revised ' estimates in New -South. Wales and Victoria snowing barely sufficient for home require* ments. When, shortly" after the break-uj» of the drought, it was anticipated that each} . of these States would have, a surplus- o? about five million bushels, we. hazarded tnej opinion' that this optimism, born gf aiy natural revulsion of feeling, was probably} too «rood to ho. tTue. It now appears, ac-

cording to the estimate of the Melbourne Herald, that Victoria's yield will only totai 8,628,000 bushels, or just about enough for food and seed requirements, leaving no surplus for export. With what she has already purchased from South Australia, New South "Wales will probably have enough wheat to keep her goinjr to the end of the season without further importations. Thus South Australia is the only_ State in a position to do an export business, and in that State the harvest is turning out better than was expected. In order therefore to prevent exportation, millers in Melbourne and Sydney will have to be prepared to pay slightly above shipping parity, and probably realising this the markets have taken a decided advance. In Sydney, where before Christmas the market had slumped to -4s 3d, milling wheat" is now quoted at 4s 7dr - In Melbourne the recovery is still more marked. Before the holidays the market declined as low as 4s Id ; this week T s cable reports the quotation a3 4s 6d, but private advice since received in the city makes the price 4s 7d, a recovery of 6d per bushel from the lowest point. The Adelaide market shows some fluctuation". Before the iholidavs the quotation waa 3s lOd, but last •week the market had risen to 4s 4d : this ■week, however, the cable gives 4s 2£d *as tbe current quotation. The following extracts from Common■wea'th reports throw a certain amount of light upon the situation : — In 'a leading article upon"Th« Position "of. Wheat," -Qio Sydney Mail remarks: — "Altog«tti«r the indications point to a CJomTOonwealth crop of 40,000,000 to 45 000 000 lushols, as again/sit, say, 70.000.000 bushels last year, thus leaving an exportable surplus of 'l2 000,000 to 14.000.000 bushels, as compared with 38.000 000 last y«ar, of -which 35,000 000 bushels have up to date actually been shipped. It is reasonable to expect that wheat, which, at the precewt moment is rather dull at 39s 6d for January-February ehimaemt. will appreciably recover ?md appiecialbly improve. At all events, they© is no need foT pessimism, *nd while growers •will need to get notions of 5s and 6s out of their heads, they should 'be chary about accepting 1 below 4s. uhlms later developments in the world's market r«nd«r a lower price inevitable. And the balance of evidefrce ait present is in favour of the more agreeable alternative." The Australasian reports, under date 4th inst. r — "Tiho local market has rem*in«<i fairly steady a* the- late advance. There is a moderate^ inquiry, partly for sflripmeixt, and, altfoough prices are too high for business in the form of eailer cargoes, the market is *,\ presemt "governed by the cheap freights for parcels by rfwmer, owing to the falling off in the quantity of wool available pending 4L« resumption of th« wool sa-les. At the game time, the supply of wheat offering from the country is still limited, the farmers being engaged in completing harvest opera--iions. There is still a feeling of uncertainty as to the effects of last week's rainfall on the quality of the wheat, definite advices being awaited from the country. New wheat 13 quoted at 4s 4Jd"to 4s 5. Old wheat is worth 4s 5d." -Jie local wheat market has scarcely yet opened for the New Year, consequently - quotations are to some extent nominal. Th" amount, of wheat available outside cf millers' holdings is very - limited, an 1 'hojders, who in many cases refused fts - per bushel, are naturally loth, to accept *s 6dJ to 4s 8d on trucks, 1 which appears to he. about -the current quotation. Some pmpll transactions are reported since the hojidaya,- one or two lines have been sold -at 4s 9d f.0.b.5.i., a few small lots are offering at as low as 4o 6d on trucks, but the amount obtainable at that price is small , On the other hand, offers of 4e 9d f.o.b.s.i have been refused, holders expressing their determination to hold for ss. In view of the faot that new wheat will be on offer in Canterbury in from three to four weeks' time, millers are naturally anxious to s&' the market back to as low a level aa possible, and 4s to 4» 3d is being mentioned as the probable opening price on trucks. ' In "view,- however, of the oontinu anoe of dry -weather, together with the firming of the markets in Australia and London, it appears very questionable whether any quantity of the new crop will be. obtainable at under 4a lOd to 5s on trucks, and possibly still higher rates may have to. be paid. This places millers in an awkward position, as at'the present price of flour they cannot -afford to. give much over 4s on truoks and at the same time make a fair profit on the jfriet. At present, however, the outlook is too complicated to venture upon anything iikj a definite forecast, especially seeinff that the weather' at present, plays so large a part in the position. This much, however, remains to be said, it .appears unikey that there will be any quantity of _ Australian flour coming to New Zealand this year, and should this competition be removed tho miller's path will"^be a much easier one. There is a fair inquiry for fowl feed, anl with very little offering, consequently it is rio6sible to sell good whole fowl feed m small lots at from 4s 9d to 5s on trucks or a better price than can be obtained for milling wheat. The demand for flour is fairly good. Tho majority of the local mills closed down for the holidays, and have not yet retumca gristing, being anxious to work down prt*-' pent stocks of flour rather than go into the market for wheat. The New Zealand Flour Millers' quotation is unchanged — namely: — Sacks £11 ss, Ws £11 15s, 50's £12, 25's £12 ss. Th« shipping price is £11 per ton, and the Inveroargill price £11 10s. Tnere is a brisk demand for offal, stocks ibeing in small compass, owing to the closing of the mills for the holidays. Quotations are unchanged — namely: — Bran £5 15s locally and £4 10s for shiomeat; pollard £5 10s both for local orders and for shiyanent. The oat market is in an unsettled condition, and in common with wheat the future depends to some extent upon tho ■weather. The new oats will be on tho market very shortly, and buyers are holding off as far as possible. Sales of small linesof f good feed oats are reported at from 2s "6d to 2s 9d f.0.b.5.i., but even at th"s prifce the demand is far from brisk. It ie anticipated that new oats will open in the north at from 2s to 2s 2d on trucks, but a great deal will depend upon the quality of the sample. The price of oatmeal, which nominally Bto&d at £18 per ton, has been reduced to i£l4 10s per ton. The local market is now well supplied s?ith new Dotatoes, which are of excellent Quality. Oamaru kidneys and British Queens are selling at from 5s 6d to 6s 6.1 ipei cwt, and Peninsulas at from 7s up to 9s 4d, according to t sample. T-fae loca.l market is well supplied with "butter, which \is quoted as follower— Dairy , fiats and dairy milk, 6£d to Sd; separator

T pats, 7d to 8d ; separator bulk, 9d to 9M ; milled — first grade B^d, second grade Bid; first grade factory, prints, lljd bcoked. Hid cash; bulk, lid cash. Cheese: Factory mediums, 6d to 6£d ; Akaroa loaf, 52<1 to od ; mediums, sid to 6d. , The market for eggs is firm at from 11J j to Is per dozen. I Quotations for poultry are as follow: — ! Hens, 2s to 2s 9d per pair; roosters, 43 i to ss; goslings, 5s to 6s; duckling's, 5s 6d to 63; ducks, 4s to 4s 3d; turkeys, hens 1 sd, gobblers 8d to 9d. I Pigs are exceedingly scarce, bacon pigs i having been sold at 6d to 6id with a very small supply at this rate. Bacon is scarce at 9d, and' hams of good quality are-un-procurable. , _. Tbe market is fully supplied with chart and new season's is expected on the market next week, consequently prices have declined, and the highest price obtainable for prime oaten sheaf is £4 10s per tou, with a weakening tendency. gaturday _ The reorganisation and strengthening of the N«w South Wales Flour Millowners ■ Association, on the lines o£ the , Victorian 1 body which last year successfully managed to regulate Home trade prices and check abuses' is (remarks the Sydney Morning Herald) proceeding satisfactorily. Mr Ji. G 4itken was recently elected president, and Air John Wallace has accepted the position of secretary, vice Mr H. C. Bnerley. It is stated that a strong effort is being ' made to get the country millers to work in harmony with the Sydney millers so far as the metropolitan trade is concerned. _ South Australia has, since the advent in London of Mr Norton as commercial agent, established a firm trade in honey, which trade is said to be profitable to local beekeepers. So long as consignments are of the best quality, it is reported + o be probable that a London markfit will hp assured equal to 2£d per lb f.o.b. Port Adelaide. The shipment of 15,3661b by the steamer Orient, which was all sold, netted 2.5 d per lb, while out of 12,0221b by the Wiloannia 10,9781b has been sold, and there has also been shipped 20,3931b by the Miltiades, 76901b by the Geelong, and 23,4721b by the Moldavia. London requirements are so urgent that Mr Norton has had to cable for monthly shipments of 7 tons each, which it is expected will further establish the South Australian connection at Home, besides relieving the glut in the local market. . IMPORT MARKET. - Business is resuming its normal course after the holidays, but so far there are scarcely any alterations in values to record. An advance has taken place in the price of clothes pegs, which are now quoted at 4s 3d to 4s 6d. The demaTii for sugar is brisker than usual ; this is partly owing to the abolition of the duty and partly to the demand for jam making. The Colonial Sugar Company are finding a difficulty in keeping pace with the orders at their Auckland ( refinery, and shipments are arriving from , Australia to supply the demand. 1 The market for sago and tapioca, which I baa been weakening for some time, shows ' signs of a further decline. The current quotation is from, 20s to 21s, with an easy tendency. - IRice keeps firm, No. 1 Japan being quoted at £16 10s to £17. There is a good demand for canned fruit, but business in dried fruits is dull. The demand for salmon (says the Produce Markets Review, dated November 22), although not large, is steady, while the statistical position is, if anything, rather stronger, and recent bids for Alaska, cabled to San Francisco, have been refused, foreshadowing an advance early in the new year. Stocks should not be permitted fccy run too low, and suitable fish secured now will undoubtedly pay for the capital locked up. The position of sardines is unaltered, and the season for summer-packed fish is over, resulting in the smallest pack on record, not only in France, but in Spain and Portugal, and it is most 1 " difficult to find parcels of suitable quality, even if buyers are willing to pay the current high prices. Shipments of Californian fruits to the United Kingdom are about 40,000 cases less than was at first expected, and, although the demand is anticipated to be smaller than usual owing to the high prices, it is doubtful whether there will be suffi1 cient of some kinds for the trade's require- ' ments until the 1908 pack is available. , There is a strong market for tomatoes on . account of the reduced pack, and at the present time there are more buyers than I sellers, as a further advance in price is practically certain. A few small shipments , of _ Gallon apples have arrived, and are , going steadily into consumption, notwith1 standing the high quotations. ! Calcutta cable advice quotes woolpacks at 2s ?£d c.i.f. for July shipments. Merchants are not inclined, however, to operate afr this fignre, and expect to see a lower market The jute market in Calcutta has ex- ' perienced considerable ups and downs recently. Mail advices, under date December 7. report that jute had been falling away steadily in price, and that this, coupled with very limited inquiry, had caused prices of gunries of all descriptions to drop materially. "At the beginning of this weak, however, says a circular by Messrs Gillander*. Arbuthnot, and Co., "jute took an unexpected turn upwards, and prices in , ihe Home markets were reported as much as £2 per- ton higher in the space of four days. This rise in jute naturally affected the prices of gunnies here. It broug-ht out speculators, especially in hessians, and greatly stiffened the ideas of the mills. The consuming markets, however, did not follow ! the rise, and to-day iute is easier, and the I market has quieted down. Australian I business still continues quiet. There has I been some inquiry for New Zea l and corn sacks to catch the steamer which sailed - early in December, and it appears that New Zealand is short of its requirements. • There has also been some inquiry from Australia and New Zealand for woolpacks for next season, but buyers on your side seem hardly prepared to pay the present rates. ! Small sales of brans have been made for January -April." j In connection with a proposition to use j the fibre of a certain sea- plant as a sub- , stitute for jute, an Adelaide syndicate has I taken up an area five miles long by one I mile and a-half v wide_off the coast to the north of Tickera. and running toward Port Broughton. It is said (says an exchange) that in this locality the plant grows to a \ height of between Bft and 15ft beneath the surface of the water, and can be gathered 'by dredging at low tide. Considerable quantities of it are washed up on the coast in different parts of South Australia, in the [form ."of -yhat. fishermen, call .sea."- or.

"hair" balls, which are sometimes as largo as cricket balls. The fibre is claimed . to possess distinct advantages over jute in that i1:i 1 : does not have to undergo _ about six courses of treatment before it is ready for weaving. As jute is used in enormous quantities the world over for the manufacture of scores of articles, it is not unlikely, it the idea prove successful, that a valuable new South Australian industry will hn formed. Already a New York company is working to obtain the fibre at Murderoo Bay and Port Gerald, in the same district. The new material has been put to practical tests, and is said to have given highly satisfactory results. THE MONEY MARKET. The recent reduction of the Bank of England of its rate of discount from 7 to 6 per cent, is doubtless to some extent responsible for the firming in the prices of wool and wheat. The realisation of the cosmopolitan character of money was he keynote to. the presidential address delivered by Sir Felix Schuster before the Bankers' ' Institute of London. What happens in one great commercial country reacts invariably on the others, and we must await the final development and ~olution of" the American crisis before we can attempt any forecast as to conditions m Europe in the immediate future. Ims authority then goes on to explain that, like every other crisis, it arose out of overconfidence, brought about by an abnormally prosperous state of affairs. Amenacns had an unbounded belief in the future of their country, a belief which its natural resources fully iiistified. They had also a way of discounting the future somewhat too rapidly. Legitimate enterprise was followed by speculation, and speculation based on credit. Vast undertakings were embarked upon in the expectation thai cash in any quantity was always at hand and lenders willinz to provide it ; and then suddeniv it was discovered that the strain had become too great. It is only fair to bankers in the United States to say that many ot them had for some time past pointed out the imperfections of their banking system, and advocated reforms. But they had not been listened to. and it was only affer much distress had been caused that public attention was directed to the that steps could be taken to provide a remedy and to supply that currency which increasing vohime of trade and rapidly growing population demanded. Nor must the blame be put altogether on the banking system of the United States, capable as that certainly is of improvement. A great many trust companies have carried on what really is banking business proper, apparently. howeveT, without the necessary safeguards and precautions; but, speaking generally, over-trading- and dependence upon credit has brought about a situation which could not be sound, and a structure which was bound to collapse, whatever the banking system might be. Credit, which is so essential to the carrying- on of modern commerce, is a sensitive organism, which must be carefully guarded from overstrain ; and bankers, _ considers the president of the London Institute, will do well to bear in mind that the too easy granting of credit to institutions and firms without sufficient working resources _of their own is not rendering _ those institutions a good service. It is inevitable that monetary strineency, suoh as has been witnessed in the United States, results jn the cripnling of industries, the destruction of trade, and the lowering- of prices of commodities. This has taken place to a large extent already, and must affect trade throughout the world. In the meantime the strain upon European gold reserves has been so great as to interfere seriously with the normal course of business, and each nation has, as it were, been thrown on its own resources. That the United States will ultimately, out of their own resources, overcome their present troubles does not} Sir Felix Schuster considers, admit of any doubt. He then somewhat significantly a< jds :—": — " As ■ for this country, while we may congratulate ourselves that the condition of trade is, on the whole, satisfactory r and the general -position sound, we cannot forget that such high rates for money as we have witnessed lately must be injurious to trade, and must also to some extent put to the test our position as the great monetary centre of the "world— a position which, indeed, involves responsibilities and perhaps sacrifices, but to maintain which no sacrifice would be too great. If there is a reaction in trade, and ; as I have remarked before, the genpral indications point to this, the demands on the cmoney market will be lessened, but I do not think, for a little time to come, at all events, we can expect low rates, as there are too many borrowers having good enough security to offer who_ are only waiting for favourable opportunities. We have also to remember that t.he Japanese Government is still lending large sums in this market, and that abundant crops in the Argentine may lead to a demand for gold in that quarter."