COMMODITIES: Quick Thresh

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One day last week the price of wheat hit a 30-year high of $3.05 a bushel at Chicago. Then it began to drop. It plummeted 34½¢ from the high in two days in its biggest drop since the fall of France.

But there, at $2.70½, it stopped. The break was painful to many traders, but not disastrous. In fact, by scaring hundreds of speculators out of the market, it might well forestall the disastrous fall that everyone had thought wheat was headed for.

Speculation, encouraged by heavy Government buying for export, was largely responsible for $3 wheat in the first place. What knocked the price down was 1) a boost in margins and 2) a change in the Government's delivery requirements. It agreed to accept many deliveries wherever the wheat is, rather than at Kansas City, as called for in contracts. This eased the pinch in wheat markets which were being drained of spot wheat for deliveries.

Furthermore, the Department of Agriculture forecast that, if "the present good weather holds, the 1947 wheat crop would be the biggest of all time—a whopping 1,212,000,000 bushels (v. 1,156,000,000 in 1946, the previous high). On the basis of farmers' planting plans, said the Government, corn and other grain crops would also be huge—depending on the weather. Despite this talk of bumper crops, grain prices steadied at week's end, even rose a bit. Traders hoped that, with most other nations short of grains, the U.S. would continue its heavy exporting for a year, anyway.