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Wednesday, February 8, 1950

Number 6
Federal Reserve Bank of Dallas

Spot cotton prices continue to advance; on Tuesday, February 7, prices of
Middling 19fb11 cotton in the ten markets averaged 31. 52 cents per pound, the
highest level since August 1. This price compares with a season's low of 29.45
cents per pound on October 5 and with a loan rate of 29.57 cents per pound on the
same ten markets average basis.
Spot markets were less active last week than in F evious weeks and spot
sales totaled only 209,800 bales, compared with 260,)00 bales a week earlier and
178,300 bales during the same week last year.
Farmers were reported to be selling loan equities last week at prices
ranging generally from $2.50 to $10.00 per bale:-This week's CCC report indicates that 2,877,194 bales of 1949-crop u. S.
cotton were pledged under the loan program through January 26, or an fulcrease of
approximately 93,000 bales for the week then ended. This is a sharp reduction
from the 152,000 bales pledged a week earlier. Cotton placed under loan to the
same date last year totaled 4.4 million bales.
Cotton placed under loan in Texas through January 26 totaled l,085,93Li
bales. The loan program for 1949-crop-C'Otton expires April JO.
The CCC still hMrnade noannouncement concerning the prices at which it
will dispose of its large holdings of 1948-crop cotton. Under the law, the minimum
sale price for domestic use must be the current support price plus 5 percent, plus
reasonable carry_:_ng charges. There have been rumors this week that the CCC will not
announce a selling program for its holdings for a long time and this is believed
to be one factor in the rise in the market.
The Senate Agriculture Cor.rrnittee yesterday ended hearings on the cotton
acreage revision bill. lhis bill, which has been passed by the House, will add
some 1. 4 million acres to the 21 million acres originally allotted for 1950. However, it is reported that this increase may be ~~ than offset by an estimated
2 million acres of unused allotments.
Prices of wheat on the Fort Worth market dropped about 4 cents per
bushel last week but regained the loss early this week, with top prices for No. 1
Hard at $2.43 per bushel on Tuesday, February 7.
The CCC announcement that it will dispose of its holdings apparently
has had little effect on the market, as there is enough free wheat obtainable at
current levels for domestic and export requirements.~--~ -~Unofficial reports indicate that rather substantial quantities of wheat
were put under loan or purchase agreement during January; official figures on the
wheat support program vvill not be released until sometime in late Feoruary. The
Support program for 1949-crop wheat expired January Jl.
-- ---The EGA last week allocated $5,432,000 in new Marshall plan aid to
Belgium and Luxembourg for the purchase of United States wheat. Western Germany
this week received an ECA grant of $9,300,000 to buy American wheat.
The Chicago Board of Trade estimates that the visible supply of wheat in
the U. S. on February 4 was about 176 million bushels, compared ·with 110 million
bushels a year earlier.
The USDA has recommended to Congress that "normal supply" be re-defined
as applied to the wheat acreagecontrol program. The national acreage allotment
must produce an &mount of wheat which, together with the previouS-year•s carryover,
vri.11 take care o1 domestic consumption and exports plus a JO percent reserve. The
USDA wants this changed to 20 percent reserve. Such a change will cut some 7
million acres off the 1951 acreage allotment:-




Number 6


Wednesday, February 8, 1950
Page 2

C 0 R N

Corn prices on the Fort Worth market experienced a further decline early
this week with prices at about 6-1/2 cents per bushel under the January high. The
top price for No. 2 l'J hite on February 7 was $1.62-1/2 per bushel.
Exports of corn last week included 1,160,000 bushels which were sold to
Spain and Ireland. Otherwise, the export demand is spasmodic and appears to be
easily supplied without providing much market interest ..
The Chicago Board of Trade estimates the visible supply of corn on
February 4 at 45 million bushels, compared with 47 million bushels a year earlier.

Prices of oats on the Fort Worth market made no significant change during
the past week; prices of 94 to 95 cents per bushel on Tuesday, February 7, were
about 3 cents above a month ago.
Export of oats from this country is said by trade specialists to be far
from satisfactory. Enough supplies have been sold off farms to satisfy domestic
feeding requirements am; to fill the needs of processors; the disappearance of
supplies is occurring largely on farms.
The visible supply of oats on February 4 was under 15 million bushels,
compared with less than ~ millioi1biishels a year earlier, according to the Chicago
Board of Trade.

Rice markets continue to hold steady but trading is relatively slow.
Houston mills were-rej)orted last week to have bid over $9.00 per barrel for long
grains and ~~ 8.00 per barrel for Zenith, but without acceptance. Growers are holding firmly to their rough rice and this is the principal strengthening influence
in the milled rice market.-The ECA has allotted $1,725,000 to Greece for purchases in this country
and Canada, undisclosed part of this amount-is for the purchase of rice.
Rouch rice stocks in all positions in the United States on January 1
totaled nearly 44 million°l)ushels, equivalent to allrout 49 percent of the 1949 crop,
according to current USDA estimates. January 1 data are not available for the years
1947 through 1949 but the current estimate may be compared with the January 1, 1946
stocks of less than 30 million bushels.



Prices of barley and grain sorghums onthe Fort Worth grain market last
week made little net change, although top prices of $1.35 per itushel for barley and
$2.35 per cwt. for grain sorghmns on February 7 were up 2 cents each.
ECA allocated $1,500,000 to Germany last week for purchase of United
States rye, but the announcement of this allocation caused no stir in the rye
market. We have moderate stocks of rye but they appear sufficient for all domestic
and export requirements.

The USDA has announced support of Irish potato prices in 1950 at 60 percent of parity. This is expected to give farmers ffilaVerage farm support pri.ce for
~season of about $1.01 per bushel, or 9 cents under the comparable support price
for 1949-crop potatoes. Support prices for potatoes in Texas will vary s easonally
from $2.50 per cwt. for marketings in April to $1.55 per cwt. for marketings during
July to October,
PMA state committees in potato producing areas have been instructed by

Wednesday, February 8, 1950
Number-e;-the Department of Agriculture to continue efforts to develop and use all practicable diversion outlets which do not involve additional handling costs and freight
charges:--=-ihere theseCfiversion outlets prove inadequate, however, the instructions
authorize dis pr_;si tion of the surplus potatoes in the immediate areas of production.
The farmer can freeze or air-dry them for use as livestock feed, or he may be
authorized to dispose of them as fertilizer or in any other vray when practicable.
The potatoes will be dyed to be suretheyare disposed of as provided and not
moved into normal channels of distribution.

1 I VE S T 0 C K
Livestock prices on the Fort Worth market are holding more or less steady,
although prices paid-for some classes of cattle were down about 50 cents per cwt.
and lambs were up about $1.00 per cwt. on February 7, as compared with a week
Livestock receipts last week on the Fort Worth market fell sharply below
receipts of the previous ·week, due largely to the rains and sleet during the early
part of the week.
With the exception of a brief period, hog prices so far this ~~nter have
held above the support level. The national average support price is $15.50 per
cwt. for February and ~16 .20 for March.
received for poultry in the Dallas market have made no significant
changes during the past week, with the exception of an increase of about 4 cents
for fryers, now at 25 cents per pound.
The government purchased 2 million pounds of powdered eggs last week,
which makes the-total""purchase so far this year about 5 million pounds. They have
sold approximately 21 million pounds of their holdings under the current disposal
program. Eggs costing rpl.26 per pound are being sold at 38 cents per pound.
The USDA announced this week that it ·will continue through March to
support egg prices so that producers vdll be guaranteedanaverage of"2rcents per
dozen on the f arrn. This also means the government will continue to paythe pro.=-ducers of drieu eggs around 96 cents per pound for their product.

Prices of 01.60 to ~1.65 per pound, scoured basis, delivered to Boston,
were paid foX:-occasional lots of 12-months wool sold in Texas last week . About 60
thousand fleeces of 8-months wool were contracted in thel5er-Rio section at 61 to
62 cents per pound, grease basis, f.o.b. These contracts""Were 1 to2Cents above
those for similar wools in the same section a year ago.
Mohair trading was dull in both Texas and Boston last week, according to
the PM.A.
The ECA granted 4 million dollars to Germany last week for purchase of
unmanufacturedwool from the u. s. and possessions for delivery by June JO.
Australian wool prices are declining from the record high peaks of a month
ago, but a strong demand for wool continues. At the Newcastle sales the best Merino
wool sold on February 6 at prices generally 5 percent lower than closint; rates at--Sydney last week. Crossbred wools were 5 to 10 percent lower and coarse and faulty
types showed a greater leclinS:-W. I.I. Pritchett
Agricultural Economist