LIBRARY OF THE UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN cop . 2. I Ur M).N CIRCULATING CHECK FOR UNBOUND CIRCULATING CORY ; UNIVERSITY OF ILLINOIS Agricultural Experiment Station BULLETIN No. 324 SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING BY L. J. NORTON AND C. L. STEWART URBANA, ILLINOIS, MAY, 1929 CONTENTS PAGE SCOPE OF STUDY 3 WHEAT SHIPMENTS 4 Sectional Differences in Season of Wheat Shipment 5 Seasonal Changes in Wheat Prices 1923 to 1926 6 Usual Seasonal Changes in Wheat Prices 6 Relation of Class of Wheat Produced to Season of Marketing 12 CORN SHIPMENTS 12 Sectional Differences in Season of Corn Shipments 14 Seasonal Changes in Corn Prices 1922 to 1926 14 Usual Seasonal Changes in Corn Prices 15 OATS SHIPMENTS 17 Sectional Differences in Season of Oats Shipments 19 Seasonal Changes in Oats Prices 1923 to 1926 19 Usual Seasonal Changes in Oats Prices 20 Comparative Earning Opportunities on Hedged and Unhedged Oats 1921 to 1927 22 STORAGE CAPACITY OF ILLINOIS COUNTRY ELEVATORS 24 Comparative Figures for Farmers' and Private Elevators 26 Season of Shipment and Storage Capacity 27 FARM STORAGE. . 27 Corn Storage 27 Small-Grain Storage 31 How Often Farm Storage Was Filled 32 Influence of Storage Capacity and Credit on Time of Sale 32 SEASON OF PURCHASE COMPARED WITH SEASON OF SHIPMENT. . 34 Seasonal Activity of Farmers' and Private Elevators Compared 37 SUMMARY AND CONCLUSIONS 38 APPENDIX.. . 41 SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING By L. J. NORTON, Assistant Chief in Agricultural Economics and C. L. STEWART, Chief in Agricultural Economics Illinois farmers market so large a proportion of the corn, oats, and wheat sold in the United States that the time of the year when these products move from the country is important to producers, dealers, and consumers alike. As indicated in a companion publication, "Market Destinations of Illinois Grain"; 1 shipments of corn, oats, and wheat from Illinois country points amount to about 215 million bushels annually, or to about 15 percent of the marketings of the entire country. The present bulletin gives information as to the season of the year when local Illinois dealers ship grain. The data gathered cover the crop years 1923-24, 1924-25, and 1925-26, and indicate the reactions of farmers and grain dealers to price and other conditions which pre- vailed during those three years. The only sources of information which have been available heretofore relative to the time that grain is marketed are the estimates of the U. S. Department of Agriculture as to the percentage of different crops marketed by farmers during different months and the trade reports of grain received at the larger primary markets. Some of the practices of Illinois farmers and grain dealers relative to season of marketing grain, shown in this publication, represent general practices carried out year after year, while others indicate merely reactions to the conditions of this particular period. Interest- ing differences are revealed in the rapidity with which various grains are marketed after harvest. There are also differences in the rate and in the season of marketing the same grain in different sections of Illinois. The data suggest that farmers regulate the time of marketing to some extent according to the price situation. SCOPE OF STUDY Part of the data for 1923-24 and 1924-25 were obtained from the books of elevator companies by representatives of the Experiment Station, and part from questionnaires filled out by managers of Illinois elevators. Both farmers' organizations and privately-owned businesses were included in this study. In all, data were obtained from approximately 280 Illinois elevators regarding the number of '111. Agr. Exp. Sta. Bui. 315. 1928. BULLETIN 324 [May, cars of corn, oats, and wheat which they had shipped each month from July, 1923, to June, 1925. The number of cars reported gives an idea of the scope of the study : 1923-24 1924-25 Corn 14,356 Oats 6,490 Wheat 8,586 cars 17,571 8,873 4,607 These total figures may be taken as a measure of the variations in shipments between the two years, as no data were included unless shipments were reported for the entire twenty-four months. Similar data were obtained from 152 elevators for the year be- ginning July 1, 1925. The total shipments from the fewer elevators reporting on 1925-26 shipments cannot be directly compared with those of the two previous years, but figures showing the proportion of each year's shipments made each month may be so compared. The figures thruout the bulletin refer to the time when the grain left country points, not to the time at which farmers sold their grain, nor necessarily to the dates when the elevators sold. WHEAT SHIPMENTS The bulk of the wheat shipped by reporting elevators during the three years covered by this study was shipped out shortly after thresh- ing time, as shown in Table 1 and Fig. 1. July Ado. Sept Oct Nov Dec. Jon. Feb Mar Apr Hoy June FIG. 1. PROPORTION OF ILLINOIS WHEAT SHIPMENTS MADE IN THE DIFFERENT MONTHS OF THE YEAR Seventy percent of the year's shipments were made be- tween July 1 arid October 1. (Graph based on data for three years, July, 1923, to June, 1926.) 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING TABLE 1. PERCENTAGE OF ANNUAL CARLOADS OF WHEAT SHIPPED EACH MONTH BY ILLINOIS REPORTING ELEVATORS Year July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June 1923-24 26 6 40 10 1 5 4 2.7 2.0 2.7 2.4 2.1 1 7 1 9 2 5 1924-25 12 9 48.8 11.8 8.1 4.2 2.9 3.5 1.8 1.3 1.0 2 3 1 5 1925-26 37 3 20 1 7 4 5 4 5 4 4 3 3 1 2 7 2 6 4 9 3 2 Average. . . 25.6 36.3 9.6 5.8 41 34 3.5 2.4 2.0 1.8 3.0 2.4 WHEAT SHIPMENTS On the average, a little over 60 percent of the year's shipments were made prior to October 1, the proportion varying somewhat from year to year, with a tendency toward later marketing each year of the three-year period. In 1923, 77 percent of the year's shipments were made between July 1 and October 1 ; in 1924, 75 percent of the year's shipments were made between these dates; and in 1925 only 64 percent of the shipments were made during this period. This tendency toward later marketing may have been the result of smaller crops, which permitted a larger proportion of the crop to be stored, as well as of a definite choice toward later marketing during the period. Sectional Differences in Sea- son of Wheat Shipments The season of heaviest shipment varied among the different sections, as may be seen by reference to Fig. 2 and Table 2. Wheat left country points least rapidly in the southern district and most rapidly in the central and eastern districts. The north- ern and western districts were comparatively slow in marketing their wheat, and the southwestern district, a heavy wheat producer, was intermediate in this respect. More detailed data are given in Tables 25 and 28 of the Appendix. FIG. 2. SEASONAL SHIPMENTS OF WHEAT FROM DIFFERENT DISTRICTS OF ILLINOIS Seasonal differences in shipments are very pronounced. They are most marked in the central and eastern parts of the state and least marked in southern Illi- nois. (Graph based on data for three years, July, 1923, to June, 1926.) BULLETIN 324 [May, TABLE 2. PERCENTAGE OF ANNUAL CARLOADS OP WHEAT SHIPPED PRIOR TO OCTOBER 1 BY ILLINOIS REPORTING ELEVATORS Crop reporting district North- west North- east West Central East West- south- west East- south- east South State 1923-24... 55 62 61 85 84 78 74 48 77 1924-25 68 70 69 79 76 71 75 61 74 1925-26.. . 58 71 56 65 86 65 72 47 64 Average 60 68 62 76 82 71 74 52 72 Seasonal Changes in Wheat Prices 1923 to 1926 Two distinct classes of wheat are grown in Illinois. Hard winter wheat is produced in the northern and central parts of the state and soft red winter in the southern part and in scattered areas elsewhere. The general trend of wheat prices at St. Louis and Chicago (Table 3) was upward thruout the period for which shipment figures were ob- tained, at least until January, 1925. With the exception of hard wheat TABLE 3. AVERAGE MONTHLY PRICE OF WINTER WHEAT AT ST. Louis AND OF HARD WHEAT AT CHICAGO DURING SELECTED MONTHS (Cents per bushel) Year No. 2 red winter at St. Louis No. 2 hard winter at Chicago Aug. Oct. Jan. April Aug. Oct. Jan. April 1923-24 .. 99 138 172 116 156 170 116 210 194 113 177 171 103 131 162 112 145 154 109 186 182 108 154 162 1924-25 1925-26 in 1923, it would have paid to hold both hard and soft wheat until midwinter in each of these three years, the high point being reached in January and February. The increase in the price of soft wheat at St. Louis from August to January, as an average of the three years, was 37 cents a bushel ; the average increase in the price of hard wheat at Chicago for the same period was 22 cents. The tendency to market wheat early, as noted above, indicates either that most Illinois farmers thought it would not pay to hold their wheat or that they did not have adequate granaries or the finan- cial resources that would permit them to do so. As a matter of fact, a more gradual rate of marketing during this particular period would have been more profitable. It should be kept in mind, however, that these three years may not have been typical. In 1926-27, the year immediately following this three-year period, no such rise occurred, the prices of both hard and soft wheat averaging higher in July than in any subsequent month. Usual Seasonal Changes in Wheat Prices The question may be asked, Why did Illinois farmers in general follow a marketing policy for wheat during these three years that 1989] SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING did not bring them the highest price? The answer depends in part on the answer to the question suggested above as to whether the seasonal variations in price during these three years were or were not typical. Seasonal Changes in Hard Wheat Prices. Average monthly prices of No. 2 hard wheat for the years 1899 to 1913 at Kansas City and for 1921 to 1925 at Chicago and Kansas City are shown in Table TABLE 4. AVERAGE MONTHLY PRICE OF No. 2 HARD WHEAT AT KANSAS CITY AND CHICAGO FOR SELECTED PERIODS (Cents per bushel) Period July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Kansas City 1 1899-1913.... 1921-1927.... Chicago 1 1921-1927.... 83 125 131 82 124 128 83 125 127 85 127 129 83 130 130 85 134 137 87 139 141 87 139 144 87 137 141 88 136 141 91 139 144 90 133 136 'Averages of prices reported in the U. S. Department of Agriculture Yearbooks and in Cropt and Markets. 'Averages of prices reported in the U. S. Department of Agriculture Yearbooks and in Crop* and Markett, except for July to December, 1921, which averages are based on figures in the annual report of the Chicago Board of Trade. 4 and Fig. 3. Lack of satisfactory Chicago quotations for this class of wheat for a period of years prior to the war necessitated the use of Kansas City quotations. Price pr Bushel *160 1.50 140 1.50 1.20 110 LOO .90 .80 Price per Bushel 1.60 1.50 1.40 1.30 1.20 I.TO 1.00 .90 .80 . 10 00 |< KI-I Q?7 No 2 R i < d W 1*2^, leaf ( -t )t5t. - < Louis S \J / / ^ ^.^i >^ ^J S s I ^ ^ A ^^ \ S "*" \No 2 Ha -dW> eatc tCh icago 1899-1913 No / 2 Re d Wheat at St Louis < 1 , , i & ^ I , 1 < 4 k_^_4 3*" JC ? Ho r2 \ L- S-o^ x" "^ *-o o -o ,*o- -. a.. .^ff' '^\ --O- , "o \899-l9l3 Nov. Dec. Jan. Feb. Mar. Apr. May dune July Au# 6ept. Oct. FIG. 8. MONTHLY AVERAGE PRICE OF No. 3 YELLOW CORN AT CHICAGO DURING A PRE-WAR AND A POST-WAR PERIOD Before the World War the price of No. 3 yellow corn advanced steadily, on the average, from December to August, but in the period since 1920 the price, on the average, has not increased prior to April. Interpretation of seasonal changes in corn prices is complicated by the changes that take place in moisture content. In the averages shown above, prices of the same grade of corn are compared, but what the exact range in moisture content of that grade was prior to the introduction of the federal grain standards is uncertain. The price of No. 3 corn at Chicago for the period from 1899-1900 to 1913-14 16 BULLETIN 324 [May, averaged 9 cents higher in June and 12 to 13 cents higher in Sep- tember than in the preceding January. Such increases would have more than paid the costs of farm storage except for losses due to shrinkage. Just how much shrinkage should have been allowed is not certain because the grade was not defined very precisely and the factors determining the grade may have changed somewhat between seasons. 1 Change* In cents per bushel HOT. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Oct. Bov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Crops of 1899 - 1913 Increases 10-15 1 III 05-10 II 1 II Illl 1 II II 1 1 03-05 1 1 1 III w \ Illl II III II 00-03 1 II Wllll Illl Illl Illl iHf III 1KTI Illl III Illl None 1 II III! mi mi 1 II II II Decreases 00-03 II mi III! i in 1 III II II Wtf 1 03-05 1 in II i 1 1 1 1 1 1 05-10 iwru Jiff 1 1 1 III ]f 10-15 n 1 Average *-.o4 -.03 .00 + .01 + .01 + .03 + .03 + .01 + .01 +.04 -.01 -.03 Cumulative increases from December .00 + .01 +.02 + .05 +.03 +.09 + .10 +.14 ".13 + .10 Crops of 1920 - 1987 Increases Over 25 1 15-25 1 1 10-15 1 1 05-10 1 1 II II 1 1 II 1 03-05 1 II 1 III 1 II 00-03 mi II II II II II 1 1 II 1 II None i 1 1 II 1 Decreases 00-03 1 III II 1 III 1 II 1 03-05 1 1 1 II 1 1 II II II 05-10 i 1 1 1 1 1 1 II 10-15 i | 1 II 1 15-25 i Average $-.04 .00 .00 + .01 -.01 .00 + .05 +.01 + .05 .01 -.04 -.03 Cumulative increases from December .00 i.Ol .00 .00 + .05 +.06 +.11 .12 +.08 *.05 FIG. 9. FREQUENCY WITH WHICH CERTAIN MONTH-TO-MONTH CHANGES IN PRICE OP No. 3 YELLOW CORN AT CHICAGO HAVE OCCURRED Before the World War the price of corn advanced regularly from one month to the next from January to August, altho not by uniform amounts during each year. Since 1920 the month-to-month changes have been too irregular to indi- cate any definite tendency. The amount of the change in corn prices from one month to the next has varied widely. The frequency with which price changes of different amounts have taken place is shown in Fig. 9. 'For more complete discussion see Bulletin 295 of this Station, Costs of Storing Corn on the Farm. 1927. 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 17 From 1899 to 1913 the price of corn ordinarily increased quite uni- formly from December to August and declined after that date. During these fifteen years the numbers of times that the average price for a month was lower than the preceding month were as follows: No- vember, 12; December, 12; January, 7; February, 2; March, 3; April, 1 ; May, 1 ; June, 4 ; July, 4 ; August, 4 ; September, 9 ; October, 8. In at least eleven of the fifteen years the price advanced each month from February to August. Substantial declines of over 5 cents a bushel from one month to the next occurred only three times between December and September during the entire fifteen-year period. The price changes from 1920 to 1927 have been more irregular than in the earlier period. Eight years is too short a period on which to base definite conclusions, but the apparent changes are worth noting, as the pre-war figures are sometimes referred to as typical of the present situation. During this later period a tendency toward certain definite changes is indicated for four months only, May, July, September and October. In August gains and losses were equally divided, but in September and October the averages were below the previous month in six of the eight years. Altho the average for November during the eight years declined during half of these years, it was slightly above that of the previous month. From December to April gains and losses were about equally divided. This contrasts with the earlier period, when typically the price began to rise in February. May was the only month during each of these eight years when the average equalled or exceeded the previous month. In June gains and losses were equally divided, altho the increases were usually larger in amount than the decreases. The largest average increase took place in July, when there were six gains and only two losses, but the average was influenced considerably by the large increase in July, 1923. As stated above, gains and losses were evenly divided in August. It is during this month that readjustment to the new-crop basis apparently begins, and it continues down to December. The only tendencies that are definite enough to be used as a guide to a general marketing policy for corn are the general summer ad- vance, the seasonal declines that occur in late summer, and the tend- ency for prices in May and July to be higher than in the previous months. OATS SHIPMENTS Shipments of oats, like shipments of corn, were reported to be rather uniformly distributed thru the year. The harvest peak of shipment preceded that of corn by several months, of course. The information reported on oats shipments is summarized in Table 10 and Fig. 10 and shown in detail in Tables 27 and 30 of the Appendix. 18 BULLETIN 324 [May, TABLE 10. PERCENTAGE OF ANNUAL CARLOADS OF OATS SHIPPED EACH MONTH BY ILLINOIS REPORTING ELEVATORS Year July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June 1923-24... 5.1 13.7 9.1 6.4 3.8 5.5 11.4 11.1 8.9 9.9 8.2 7 1924-25 4.3 23.8 12.5 6.8 3.6 7.5 9.6 4.9 6.5 6.4 8 3 5 8 1925-26 12.3 14.4 7.2 5.8 5.1 6.3 7.3 8.4 6.8 8.1 8.2 10 1 Average. . . 7.2 17.3 9.6 6.3 4.2 6.4 9.4 8.1 7.4 8.1 8.2 7.6 July AUB. oept. Dot. Nov Dec Jon Feb dor Apr Hoy June FIG. 10. PROPORTION OF ILLINOIS OATS SHIPMENTS MADE IN THE DIFFERENT MONTHS OF THE YEAB Shipments have been distributed rather uniformly thru the year, consider- ing the state as a whole. There is a small peak in August and a noticeable decline in November, but on the whole a regular movement of oats is suggested by these figures. (Graph based on data for three years, July, 1923, to June, 1926.) July, August, and September shipments of oats varied from year to year because of differences in dates of harvest. In 1924-25 a larger proportion was shipped at or shortly after harvest than during the other two years. From July to September, 1924, 40 percent of the year's oats shipments were made, as compared to 25 percent for the same month in 1923 and 33 percent in 1925. On a quarter-year basis we have the following division of the year's shipments: July to September, 34 percent; October to Decem- ber, 19 percent; January to March, 25 percent; April to June, 24 per- cent. About one-third of the shipments were made at harvest time or shortly afterwards, but following this season shipments fell off, so that the total for the six months from July to December was about one-half of the year's total. During each of the two other quarters about one-fourth of the year's shipments were made. Illinois oats, it is apparent, were not dumped into the terminal markets at harvest time. This means that the storage service needed SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 19 in marketing them was rendered to a large extent by local interests, either by country elevators or by farmers. Sectional Differences in Season of Oats Shipments Sectional differences in the season of marketing oats are shown in Fig. 11. The northeast and eastern districts of Illinois, both of which are important producers of oats for market, made rela- tively small shipments during the period from July to Sep- tember, compared with the balance of the state. The ex- tent to which oats are stored locally is probably influenced by the storage capacity of the elevators in these different areas, which is indicated by Fig. 14. OAT5 SHIPMENTS Seasonal Changes in Oats Prices 1923 to 1926 The average prices of No. 3 white oats at Chicago for selected months during the period of this study are shown in Table 11. The changes indicate that the storage of oats from August to January would have returned the holder a gross gain of 8 cents both in 1923 and 1924 and only 1 cent in 1925; and that storage from August to April would have returned the holder 10 cents in 1923-24, would have lost him 8 cents in 1924-25, and would have earned him 1 cent in 1925-26. It has been shown that oats were mar- keted least rapidly in 1923-24, the year during this period when stor- age paid best, and most rapidly in 1924-25, the year in which delayed marketing, particularly after January, was costly. FIG. 11. SEASONAL SHIPMENTS OF OATS FROM DIFFERENT DISTRICTS OF ILLINOIS In the principal oats producing dis- tricts shipments are quite regularly dis- tributed thru the year. During the Oc- tober-December period shipments fall off. In western and southern Illinois, where only a few oats are marketed, shipments have tended to be concen- trated immediately after harvest. (Graph based on three years, July, 1923, to June, 1926.) 20 BULLETIN 324 [May, TABLE 11. AVERAGE MONTHLY PRICE OF No. 3 OATS AT CHICAGO DURING SELECTED MONTHS (Cents per bushel) Year August October January April June 1923-24 38 43 46 48 51 1924-25 50 50 58 42 49 1925-26 41 39 42 42 40 These observations are based entirely on cash prices. If the oats had been hedged by the sale of futures, the results would have been entirely different. The process of hedging is discussed further on pages 22 to 24. Usual Seasonal Changes in Oats Prices How typical were the price changes during the three years covered by this study? The average seasonal increases in prices shown in Table 12 and Fig. 12 do not indicate any very large profit from storing oats. If TABLE 12. AVERAGE MONTHLY PRICE OP No. 3 OATS AT CHICAGO DURING Two PERIODS (Cents per bushel) Period Aug. Sept. Oct. Nov. | Dec. Jan. Feb. Mar. Apr. May June July 1899-1913... 1921-1927.... 35 40 36 41 36 42 36 43 37 46 38 46 39 46 39 46 39 46 40 48 41 48 41 45 in the fifteen years from 1899 to 1913 an elevator had stored 10,000 bushels of oats each year from August to December, it would have had a gross profit of about 2 cents a bushel, or $200 with which to pay the holding costs; if it had stored this quantity of oats from August to February, it would have made a gross profit of about 4 cents a bushel, or $400; and if it had stored them from August to June, a gross profit of about 6 cents, or $600 would have been realized. Out of these increases the elevator would have had to pay for insurance, use of storage space, shrinkage, and interest on $3,500 for four, six, and ten months respectively. It is obvious that the storing of oats during the average year was not very profitable during this pre-war period, in so far as changes in cash prices are the basis for judgment. During the eight years from 1921-22 to 1927-28 the average in- crease in oats prices from August to December has been 6 cents a bushel. If oats stored in August had been sold during January, February, and March, the average gross earnings would have been about 1 cent a month, providing the storer depended merely on changes in cash prices. Storage space must be rather cheap to make this a profitable operation. The seasonal variation in price of oats is quite regular from year to year (Fig. 13). During the earlier period, 1899 to 1913, prices 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 21 increased rather regularly or remained unchanged from one month to the next between August and the following May. Only during the month of October did the declines equal the increases. But typically these month-to-month changes were small. Between these two months Price per Bushel .50 45 40 .35 .30 .25 .0 .15 .10 .05 Price per Bushel *50 .45 .40 .35 .30 .25 .20 .15 .10 .05 .00 ,192 -19 / \^ X > ^_ < , * > 4 / --"'' "\ S I699-I9 I Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar Apr May June July FIG. 12. MONTHLY AVERAGE PRICE OF No. 3 WHITE OATS AT CHICAGO DURING A PRE-WAR AND A POST-WAR PERIOD Prior to the World War, oats prices advanced, on the average, rather steadi- ly thru the year, altho the average increase from August to May was only 5 cents a bushel. For the period since 1921 there has been little rise after De- cember. the price declined from one month to the next more than 3 cents a bushel only four times during the fifteen-year period and increased by 5 cents or more a bushel only once. The month most regularly below the previous month was August; and this reflected the readjustment to the new-crop basis. The period since 1921 has been rather brief to use as a basis for very definite conclusions. A study of Fig. 13, however, will show that the same general tendencies have operated thru this period as thru the earlier period, altho the same degree of regularity is not notice- able. In October, November, December, and April the price was gen- erally higher than during the previous month, and in July and August it was generally lower. During the other months no definite tendency is to be noted. Changes from month to month were generally not large; from September to June they exceeded 5 cents a bushel only six months out of the eighty included in the period covered. 22 BULLETIN 324 [May, Changes in cents per bushel Aug. Sept. Oct. Nov. Dec. Jan. Feb. Var. Apr. Kay June July July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Hay June Crops of 199 - 1913 Increases II 05-10 1 1 1 II 03-05 II 1 II Ill Ill II Ill III II 00-03 III Hfl II WtTl 1HT Illl Wtf WfT IHf J4tf Will 1 1 "one III III Wft 1 WtT JHT 1 III W 1 .mr i 1 wti Illl Decreases 00-01 1 III IKf III III 1 III II ii- III HI III 03-05 II 1 1 II i II 05-10 AHT 1 1C-15 II 15-25 1 Average -.05 + .01 .00 .00 + .01 + .01 + .01 .00 .00 + .01 +.01 .00 Cumulative increases frosi August + .01 + .01 +.01 + .02 + .03 + .0 1 * + .0, + .04 + .05 +.06 + .06 Crops of 1921 - 1927 Increases 05-10 1 1 1 03-05 1 II II 1 III II 1 00-03 1 1 II Illl Illl II Illl III -Wtf 1 1 None II 1 II Illl 1 II Decreases 00-03 II II 1 1 II II II Illl 1 03-05 Illl 1 II 05-10 1 1 1 II 1 Average $-.02 +.01 + .01 + .01 + .03 .00 .00 .00 .00 + .02 .00 -.03 Cumulative Increases from August +.01 + .02 +.03 + .06 +.06 + .06 +.06 + .06 + .08 + .08 +.05 This Includes one decline of 12 cente. FIG. 13. FREQUENCY WITH WHICH CERTAIN MONTH-TO-MONTH CHANGES OCCURRED IN THE PRICE OF No. 3 WHITE OATS AT CHICAGO Month-to-month changes in the price of this crop have been rather irregu- lar. However, only in June and July were decreases from the preceding month more common than increases. Comparative Earning Opportunities on Hedged and Unhedged Oats 1921 to 1927 The above discussion is based entirely on changes in cash prices. Large quantities of oats are stored on an entirely different basis, future contracts being sold on the Chicago Board of Trade or other grain exchange against the cash grain as it is purchased. This use of future contracts in connection with transactions in cash grain is known as hedging. Gross profits from storage arise from the differences between cash and future prices at the time of purchase and sale. The normal rela- tionship is for the cash price to be below the future price until the delivery month arrives or shortly before. The margin narrows, how- ever, as the delivery month approaches and usually, just before or during the delivery month, the cash price goes to a slight premium above the price of the future. 1929] SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 23 The margin earned on the storage of oats hedged by the sale of futures is the amount by which the cash price is below the price of the future at the time of purchase, plus the amount by which the cash price exceeds the future price at the time of sale, minus the costs of hedging. For example, if oats are bought in August for 40 cents a bushel at a time when the price of the December future is 46 cents, and are sold in November for 42 cents when the December future is 41 cents, the gross margin earned is 7 cents a bushel, or the sum of the difference between the future price and the cash price in August (46 40 = 6) and the difference between cash and future in November (42 41 = 1). Another way of expressing this is to compare cash and future prices separately at time of purchase and sale. Cash oats bought for 40 cents and sold for 42 cents would yield a profit of 2 cents; and a future contract sold at 46 could be cancelled by a purchase at 41 cents, yielding a profit of 5 cents. The total profit earned on the entire transaction would be 7 cents. This profit was earned in spite of the fact that oats prices failed to make their normal seasonal increase; the decline in the price of the future off-set the failure of the cash market to increase. If the market had advanced, the fact that the future contract had been sold at 46 cents could have prevented the holder of the oats from getting a profit much above 7 cents. In actual practice the transaction might be more complicated than this because the holder of the oats might have first hedged them by selling September futures and then shifted to December and then possibly to May, his total margin being influenced by changes in the relationship between the price of these various futures. The type of transaction just described is quite different from one that is sometimes used by country grain shippers, in which the farmer delivers his oats but does not sell them. The elevator ships the oats to market, sells at the current market price, and buys an equivalent quantity of futures. Later the farmer sells the oats to the elevator man, who then sells the future he has bought to protect himself against variations in prices. On this transaction the elevator operator loses the difference between future price and cash price instead of gaining it, and is bound to lose money unless storage charges are collected from the farmer. To illustrate, using the prices given above, the elevator man sold the oats for 40 cents and bought futures for 46 cents; on this transaction he stood a loss of 6 cents. Later he bought oats from the farmer for 42 cents and sold the future for 41 cents. On this he lost 1 cent, making a total loss of 7 cents. This would work out as a losing transaction whenever there was the normal relationship between cash and future prices even if the market had advanced. This type of transaction is an undesirable one and should be clearly distinguished from a hedge where futures are sold against grain which has been bought and is being stored. 24 BULLETIN 324 [May, Theoretical earnings or losses from holding unhedged oats from August to March and the carrying charges earned by holding hedged grain for the same period have been computed by comparing prices on certain days in August the 5th, 10th, 15th, 20th, 25th, 30th, or the next business day with prices on the corresponding dates during the next March, and averaging the earnings for the years 1921-22 to 1926-27 (Table 13) . This leaves out of account any earnings or losses TABLE 13. SEASONAL CHANGES FROM AUGUST TO MARCH IN CASH PRICE OF No. 3 OATS AT CHICAGO, 1921-1927; DIFFERENCES BETWEEN MAY FUTURE PRICE IN AUGUST AND IN MARCH; AND COMPUTED AVERAGE OPPORTUNITY FOR GROSS EARNINGS ON HEDGED OATS STORED FROM AUGUST TO MARCH (Cents per bushel) Increase or Amount by Amount by Computed margin decrease in which price which cash of opportunity for Year cash prices between August of May future exceeded cash price was above May future gross earnings on hedged oats stored and March price in August in March from August to March 1921-22... + 37 +6 1 +1 4 +7 5 1922-23 +12.0 +3.2 +1.6 +4 8 1923-24 + 8.2 +1.9 +1.3 +3.2 1924-25 .' 2 8 +4 2 +2 5 +6 7 1925-26 - 1.3 +5.4 + .5 +5.9 1926-27 + 7.6 +6.6 +3.0 +9.6 Average + 4.6 +4.6 +1.7 *" +6.3 from first hedging by sale of December future and later changing to May, a procedure which would have been followed in practice in many cases. The apparent opportunity for earnings from holding hedged oats from 1921-22 to 1926-27 averaged 6.3 cents per bushel gross, while that for earning on unhedged oats was 4.6 cents. Out of these earnings it would have been necessary to pay the costs of hedg- ing, including commission charges of % cent a bushel and interest on margins, which would have been less than % cent a bushel. There was apparently a greater advantage during this particular post-war period in hedging stored oats than in holding the grain without hedges. The differences were not large, however, on the average, and in two out of the six years the unhedged oats would have earned the larger returns. STORAGE CAPACITY OF ILLINOIS COUNTRY ELEVATORS The average storage capacity of 344 country elevators reporting for 1925 was 38,750 bushels exclusive of corncrib capacity. This is somewhat larger than the average of 36,300 bushels reported as of May 15, 1918, for 2,031 elevators in Illinois licensed by the United States Grain Corporation, 1 and 32,060 bushels reported as of February, 1918, for 1,057 Illinois elevators filing schedules with the Federal Trade 'Wheat and rye statistics. U. S. Dept. Agr. Statis. Bui. 12, 50. 1924. 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 25 TABLE 14. STORAGE CAPACITY OF ILLINOIS COUNTRY ELEVATORS AND OF CORNCRIBS OPERATED BY THEM IN 1925 Crop reporting district Approxi- mate num- ber of ele- vators in district Elevators reporting capacity of their Average reported capacity of Elevators Corncribs Elevators Corncribs Northwest 228 243 351 157 354 285 190 192 number 42 44 65 15 89 59 20 10 perct. 18.4 18.1 18.5 9.6 25.1 20.7 10.5 5.2 number 13 13 31 8 42 25 16 7 perct. 5.7 5.3 8.8 5.1 11.9 8.8 8.4 3.6 bu. 24 952 48 477 54 600 19 500 38 657 24 890 58 150 23 900 bu. 3 340 3 360 9 900 3 190 9 270 11 300 50 440 2 540 Northeast East West Central East-southeast South State 2 000 344 17.2 155 7.8 38 750 12 360 ELEVATOR CAPACITV Commission. 1 The fact that the average capacities reported for February and May, 1918, were 17.5 percent and 6.3 percent less than those reported for 1925 does not necessarily indi- cate that the average capacity of elevators is increasing. The figures for 1925 refer to only about one-sixth of the elevators in the state, while the reports of the Grain Corporation included all elevators and the report of the Federal Trade Commission included about one-half. The 1925 figures may not have in- cluded as many of the smaller elevators as did the earlier and more complete surveys. It is quite possible, however, that the trend toward reduction in the number of firms engaged in the country grain trade has in- creased the average amount of space available per elevator. The average reported ca- pacii/y of elevators and corn- cribs varied considerably in dif- ferent parts of the state. These average reported capacities, together with the proportions of the ele- vators in the different districts on which the averages are based, are Average of State 38,800 Bushels Fia. 14. AVERAGE CAPACITY OF REPORT- ING ELEVATORS IN DIFFERENT DISTRICTS OF ILLINOIS The elevators in the eastern half of the state show much larger capacities than those in other parts. The average capacity of all elevators reporting (344) was 38,800 bushels in 1925. 'Country grain marketing. 34, 62, 67. Sept., 1920. Fed. Trade Comn. Report on Grain Trade 1, 26 BULLETIN 324 [May, shown in Table 14 and Fig. 14. In general, elevators in the eastern part of the state reported the largest capacities. Elevators in the oats- shipping districts were larger than those in the wheat districts. This would be expected because oats are more commonly stored in Illinois at country points than is wheat. A considerable amount of supplemental storage capacity for hous- ing ear corn is reported. The extent of this corncrib storage is espe- cially to be noted in the districts along the southern edge of the main corn marketing region, that is to say, in the west-southwestern and east-southeastern districts. Practically all the elevators in the latter district reported corncribs, and the amount of such crib capacity was nearly as large as the amount of storage space inside the elevator proper. In fact the reporting elevators in this district were of larger average capacity, both inside and outside, than those in any other area. They averaged twice as much total storage space as the elevators in any other district except the eastern. Comparative Figures for Farmers' and Private Elevators For the state as a whole the average capacity of farmers' and privately owned elevators was practically identical (Table 15). In TABLE 15. STORAGE CAPACITY OF ILLINOIS COUNTRY ELEVATORS IN 1925: EXCLUSIVE OP CORNCRIB CAPACITY (Expressed in bushels) Crop reporting district Approxi- mate num- ber of country elevators Fanners' elevators reporting Privately-owned elevators reporting Total reporting elevators Num- ber Average capacity Num- ber Average capacity Num- ber Average capacity Northwest 228 243 351 157 354 285 190 192 10 23 33 10 51 39 2 4 bu. 33 100 53 217 60 515 18 800 36 627 23 000 72 500 7 250 32 21 32 5 38 20 18 6 bu. 22 406 43 285 48 500 20 900 41 382 28 575 56 555 35 000 42 44 65 15 89 59 20 10 bu. 24 952 48 477 54 600 19 500 38 657 24 890 58 150 23 900 Northeast East West Central West-southwest East-southeast South Total 2 000 172 38 800 172 38 700 344 38 750 the northern and eastern parts of the state, however, farmers' elevators reported larger average capacities. In the northern district an average capacity of 53,000 bushels was reported for the farmers' elevators and 43,000 bushels for the privately owned elevators, and in the eastern district 60,000 bushels for the farmers' elevators and 48,000 bushels for the privately owned elevators. On the other hand, a larger proportion of privately owned elevators than of farmers' elevators reported corncribs. The average capacity reported for the private companies was 14,700 bushels compared with 9,400 for the farmers' elevators (Table 16) . In the eastern and cen- SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 27 TABLE 16. CORNCRIB CAPACITY OP ILLINOIS COUNTRY ELEVATORS IN 1925 (Expressed in bushels) Crop reporting district Farmers' elevators reporting Privately-owned elevators reporting Total reporting elevators Number Average capacity Number Average capacity Number Average capacity Northwest 1 7 12 6 22 15 1 4 bu. 2 000 2 940 12 580 2 500 11 830 8 300 60 000 850 12 6 : 19 2 20 10 15 3 bu. 3 450 3 850 8 210 2 250 6 450 15 800 49 800 4 830 13 13 31 8 ' 42 25 16 7 bu. 3 340 3 360 9 900 3 190 9 270 11 300 50 440 2 540 Northeast . .... East. .. West Central West-southwest East-southeast South Total 68 9 450 87 14 638 155 12 360 tral districts the farmers' elevators reported larger corncribs per ele- vator than the private companies. Season of Shipment and Storage Capacity Seasonal differences in the season of shipping oats appear to have been influenced by differences in elevator capacity, altho this was not true for corn. The northeastern and eastern districts, both having large elevators, distributed their shipments of oats more uniformly than the other districts, which had smaller storage capacity. On the other hand, in the southern district, where wheat shipments were most uniformly distributed, elevator capacity was relatively small. This section of the state produces a small surplus of oats and has adequate farm storage facilities for small grain. FARM STORAGE Information obtained from 471 farmers in all parts of the state indicate that the average farm is fairly well supplied with storage space for corn, but that in certain sections of the state storage for small grain is not available on farms. This refers to the average, of course, for individual farms in all sections are short of corn storage space. 1 Corn Storage On the 471 farms for which the owners or operators reported, the averr ge yearly production of corn from 1922 to 1926 was 2,848 bushels and the average capacity of permanent corncribs was 2,978 bushels. Temporary cribs were reported with an average capacity of 659 bushels, of which 298 bushels were outside of buildings. For years lr The reports from 471 farmers on which this discussion is based were obtained thru A. J. Surratt, Agricultural Statistician, Illinois Cooperative Crop Reporting Service, and summarized by L. F. Rickey, Associate in Grain Marketing, Depart- ment of Agronomy, University of Illinois. 28 BULLETIN 324 [May, O H O 6 8 go g 2 ta S K S* O tf o 1 I t 1^ Jill l " 4 t OOO>COe50> OO OO 1^ O O O O -^ O to Ci oo -0 ^H<-imnoa -H T~~ * CO O^H t> ^H CM CO IN "< < >-c IS t o. o 2^ o s s- o (O *- la g 8| 1-i il SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 29 of large crops the storage used averaged 3,637 bushels, 82 percent being permanent cribs, 10 percent temporary inside cribs, and 8 per- cent temporary outside cribs. This temporary storage, particularly that outside of building, is, of course, very elastic. The permanent cribs alone are more than adequate to take care of an average crop. Nevertheless, 124 of the 471 farms reported permanent cribs with a capacity less than their average crop. The relationship between storage and average crop did not vary widely in different parts of the state (Table 17 and Fig. 15). Per- DISTRICT I NORTHWeST 3 NORTHEAST 4 WEST ^A WEST SOUTHWEST 5 CENTRAL 6 EAST &A EAST SOUTHEAST 7 SOUTHWEST 8 SOUTHEAST STATE I 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5600 6000 BUSHELS PERMANENT CRIBS I I TEMPORARY STORAGE IN BUILDINGS TEMPORARY STORAGE OUTSIDE AVERAGE CORN CROP PER FARM, 1922-1926 FIG. 15. AVERAGE CORN STORAGE CAPACITY REPORTED ON 471 ILLINOIS FARMS IN 1926, AND AVERAGE CORN CROPS FROM 1922 TO 1926, BY CROP REPORTING DISTRICTS Except in the western and west-southwestern districts, where the bulk of the corn grown is fed to livestock, the permanent corn-cribs on reporting farms would store the average corn crop. The margin is not large, however, in any of the eight districts, and in all of them temporary storage is required in years of large crops. The largest margin between the average crop and permanent crib capacity was in the two principal corn-marketing districts the central and the eastern. manent cribs exceeded the average crop by the largest amounts in the eastern and central districts of the state and were less than the aver- age crop in the west and west-southwest sections. 1 In all districts the total exceeds the average crop when temporary storage is included. These farmers also estimated the average crib capacity on all farms in their townships. The reporting farmers operated or owned farms larger than the average, and consequently the average storage 'For area included, see Fig. 2. 30 BULLETIN 324 [May, U I g Z co o -* < (M * (M -r . o os co >o ^ o -r to co a ec o oo t-- * oo ** -^ w rM ^ t 00 rH wr o oo t- oo o r- >o r~ -i- -H t^ o r~ -iot 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 31 capacity was larger than on the average farm. The average of all the estimates was 2,065 bushels of permanent corncribs. If tempor- ary storage was available on these farms in the same ratio as on the reporting farms, this would amount to about 450 bushels ad- ditional, making a total capacity of 2,500 bushels per farm. From 1922 to 1926 the average farm over 20 acres in size in Illinois pro- duced about 1,600 bushels of corn and in 1925, the year of the largest crop, about 1,900 bushels. The estimates of crib capacity exceed this figure and indicate that, on the average, farm storage capacity for corn is more than adequate. Small-Grain Storage The average small-grain crop, as reported by the 471 farmers, was 1,990 bushels, while the average tight-bin storage capacity for small grain was 2,068 bushels. This indicates that in years of large DISTRICT I NORTHWEST 3 NORTHEAST 4 WEST 4 A WEST SOUTHWEST 5 CENTRAL 6 EAST &A.EAST SOUTHEAST 7 50UTHVYE5T 8 SOUTHEAST STATE O 500 1000 I50O 2000 2500 3000 3500 40OO BUSHELS AVERAGE CAPACITY AVERAGE CROP OF SMALL GRAIN ptR FARM, 1922- 1926. FIG. 16. AVERAGE CAPACITY OF TIGHT-BIN STORAGE FOR SMALL GRAINS REPORTED ON 471 ILLINOIS FARMS IN 1927, BY CROP REPORTING DISTRICTS The average crop of small grains from 1922 to 1926 exceeded the storage space in tight bins in four of the Illinois crop reporting districts the west- southwestern, the central, the eastern, and the east-southeastern. This, of course, makes the marketing of a part of the small grain at threshing time necessary. In the northeastern district, where small grain production averages largest per farm, there is a good margin of storage space in the average year. crop it would not be possible for farmers to store the entire crop. On 123 of these 471 farms the reported average storage space was less than the average production reported. Details by districts are shown in Table 18 and Fig. 16. In the northern, western, and southern districts tight-bin storage appears adequate for farm storage, but in the central, west-south- 32 BULLETIN 324 [May, western, eastern, and east-southeastern districts this class of storage space appears inadequate for even an average crop of small grains. In these sections sale at harvest time is rather common. The estimates for all farms indicate a larger capacity relative to production than that given for reporting farms. The average of these estimates for the state was 1,287 bushels of tight bins, while the average production of small grains from 1922 to 1926 was about 875 bushels per farm. The average storage capacity per farm exceeded both the average crop and the largest crop during the period 1922 to 1926 in all except the west-southwest, central, and eastern districts, the deficiency in storage space being most marked in the central and eastern districts. Unquestionably there are many farms in these districts not supplied with adequate storage space for their small-grain crops. Facts given in reply to the question regarding storage indicate that the average reporting farmer, with a comparatively easy oppor- tunity to store ear corn in improvised cribs, had a fairly adequate amount of corn storage space, and that lack of storage on the farm, therefore, did not compel country elevators to store large quantities nor to ship it quickly. Small-grain storage, however, is indicated to be in a somewhat different position. Farm storage for these crops was not so generally available, and this has been a factor tend- ing to hasten marketing by the farmers, making it necessary for country elevators or terminal marketing agencies to store these grains. How Often Farm Storage Was Filled To the question, How many years out of the last five was the permanent storage space for corn and small grain filled? one-fifth replied that permanent storage for both corn and small grain was filled during each of the five years (Table 19) . Permanent corn storage was filled, on the average, about two years out of five, and the small-grain storage about one year in three. The corn storage was more completely utilized in the western districts, where the cribs averaged full utilization about half of the years. The eastern and central districts ranked next. Small-grain storage was most completely utilized in the central district where, on the average, available space was completely utilized nearly half of the years. Influence of Storage Capacity and Credit on Time of Sale The number of years that time of sale was influenced by lack of storage space or lack of credit is shown for different parts of the state in Table 20. In answer to the question, How often in the last five years would you have held grain until later in the season if more adequate stor- 1929} SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 33 TABLE 19. DISTRIBUTION OF REPLIES OF ILLINOIS FARMERS TO THE QUESTION AS TO THE NUMBER OF YEARS OUT OF FIVE (1922 TO 1926) PER- MANENT GRAIN STORAGE WAS FILLED Crop reporting district Number of reports Number of years permanent corn storage was filled Proportion of years that permanent corn storage was filled 1 2 3 4 5 Northwest 50 71 49 65 35 60 42 34 35 18 21 10 8 6 15 7 9 11 10 19 9 23 10 16 15 .10 9 7 -44 9 12 5 6 8 9 1 3 3 3 6 5 2 3 2 7 4 6 4 5 1 2 3 2 8 8 14 11 9 20 7 1 5 perct. 35.6 33.8 49.8 43.1 45.7 46.0 39.5 30.0 37.1 Northeast West West-southwest Central East East-southeast Southwest State . 441 100 105 23.8 121 27.4 71 16.1 34 7.7 27 6.1 83 18.8 40.3 Percentage of total Crop reporting district I Number of reports Number of years permanent (mail-grain storage was filled Proportion of years that permanent small -grain was filled 1 2 3 4 5 Northwest 50 72 47 59 34 55 39 32 29 21 23 21 21 11 24 14 15 16 12 19 6 16 6 9 10 11 5 5 5 8 2 1 2 3 2 1 4 7 4 3 2 4 3 2 2 7 1 1 3 2 6 11 11 16 12 15 8 1 3 perct. 28.8 36.9 34.5 38.0 47.6 38.5 34.9 18.1 24.8 Northeast . . . West West-southwest Central East . . . .... East-southeast Southwest Southeast ... State 417 100 166 39.8 94 22.5 29 7.0 29 7.0 16 3.8 83 19.9 34.4 Percentage of total age facilities had been available on the farm? nearly 75 percent of those responding stated that lack of storage space was not a factor, and only 9 percent stated that it was a factor three or more years out of five. In the eastern district, however, this factor determined the time of sale in about one-fifth of the years and in six other districts over one-tenth of the time. In answer to the question, How often in the last five years would you have held grain until later in the season if bank credit had been mort, readily available? nearly three-fourths of the 230 who reported stated that lack of credit was not a factor but about one- sixth indicated that such a condition influenced time of sale at least three years out of five. This is a slightly larger proportion than re- ported that they had been affected by deficient storage facilities. In the central district the replies indicated that lack of credit influenced time of sale, on the average, about 31 percent of the time, and in the eastern district about 28 percent of the time. These are rather large proportions. As these reports came from farmers believed to be above the average, it is probable that they underestimated the significance of 34 BULLETIN 324 [May, both lack of storage space and bank credit, in so far as these factors related to the general body of farmers. TABLE 20. DISTRIBUTION OF REPLIES OP ILLINOIS FARMERS TO QUESTIONS AS TO STORAGE AND BANK CREDIT BEING FACTORS INFLUENCING TIME OF SALE OF GRAIN DURING FIVE YEARS, 1922 TO 1926 Crop reporting district Number of reports Number of years in which grain would have been held had storage been available on farm Proportion of years lack of storage was a factor 1 2 | 3 4 5 Northwest 26 35 36 47 26 39 27 22 21 20 25 26 31 20 28 20 18 14 4 5 2 6 1 3 2 2 1 3 4 6 4 2 1 2 3 2 1 1 2 1 1 1 1 1 1 2 1 3 1 5 2 perct. 7.7 12.0 13.9 15.3 12.3 20.5 13.3 5.4 14.3 Northeast . West West-southwest East East-southeast Southeast State 279 100 202 72.4 25 9.0 26 9.3 8 2.9 4 1.4 14 5.0 13.4 Percentage of total Crop reporting district Number of reports Number of years grain would have been held had bank credit been more readily available Proportion of years lack of bank credit was a factor 1 2 3 4 f Northwest 25 32 27 37 22 34 23 16 14 19 24 20 28 14 21 19 13 11 3 1C 1 1 1 1 3 3 4 1 1 4 1 3 2 1 1 1 1 2 1 1 2 2 3 4 5 5 2 perct. 13.6 15.6 16.3 17.8 30.9 27.6 11.3 10.0 12.8 Northeast West West-southwest Central East . . East-southeast Southwest Southeast ... State 230 100 169 73.4 7 3.0 13 5.6 12 5.2 6 2.6 23 10.0 18.1 Percentage of total SEASON OF PURCHASE COMPARED WITH SEASON OF SHIPMENT Information as to the exact date of purchase and sale of grain by elevators included in this study is not available. The division of Crops and Livestock Estimates, U. S. Department of Agriculture, has compiled information regarding the distribution, by months, of the sales of grain by farmers, based on reports from country ele- vators. For the period July, 1914, to June, 1923, these data have been published 1 and for the three-year period July, 1923, to June, 1926, the data for Illinois were made available thru the courtesy of the Division. The two series are graphically compared in Figs. 17 to 19. Wheat. A comparison of the purchase and shipment figures indi- cates that elevators shipped wheat about as rapidly as they purchased it (Table 21 and Fig. 17). The seasonal peak which was evident in shipments may also be noted in purchases. Supplement to Crops and Markets, April, 1925. 1929] SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 35 TABLE 21. CUMULATIVE PERCENTAGE OF YEAR'S PURCHASES AND SHIPMENTS OF WHEAT MADE TO END OF EACH MONTH BY ILLINOIS REPORTING ELEVATORS To end of July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Purchases, 1914-23 28.3 52.5 62.8 70.6 76.2 80.1 84.4 88.8 92.3 95.4 98 1 100 Purchases 1923-26 25.7 57.9 69.5 75.6 79.5 83.6 87 9 90.9 93 4 95 8 98 2 100 Shipments, 1923-26 25.6 61.9 71.5 77.3 81.4 84.8 88.3 90.7 92.7 94.5 97.5 100 Marketings by formers, 1925- (926 Shipments by elevators, 192}- 1926 July Aug Sept. Oct. Nov. Dec. Jon Feb Kor Apr May June FIG. 17. COMPARATIVE SEASONS OF PURCHASE AND SHIPMENT OF WHEAT BY ILLINOIS COUNTRY ELEVATORS Purchases and shipments of this grain have a similar seasonal variation, indicating that elevators tend to ship wheat about as rapidly as they pur- chase it. Corn. The figures for corn suggest that this grain was shipped about as rapidly as purchased (Table 22 and Fig. 18) . A close agree- ment is to be noted between the distribution of purchases and ship- ments. The comparative uniformity of the flow of corn to market is apparently largely the results of farm storage or ownership by farmers of grain stored in local elevators rather than storage by ele- vators. 36 BULLETIN 324 [May, TABLE 22. CUMULATIVE PERCENTAGE OF YEAR'S PURCHASES AND SHIPMENTS OF CORN MADE TO END OF EACH MONTH BY ILLINOIS REPORTING ELEVATORS To end of July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Purchases, 1914-23 6 9 13 1 21 1 27.7 38 49 5 62.5 72.5 78.5 84.5 91 6 100 Purchases 1923-26 8 1 15 8 24 5 32 1 41 6 53 65 8 74 7 79 8 83 6 90 8 100 Shipments, 1923-26 7.0 13.9 22.1 29.7 40.8 52.1 65.8 74.2 79.7 83.9 90.8 100 Marketings ty formers, I92J-I926 Shipments by elevotor.5,1923-1926 July Aug. Sept. Oct. Nov Dec Jan Feb Mar Apr May June FIG. 18. COMPARATIVE SEASON OF PURCHASE AND SHIPMENT OF CORN BY ILLINOIS COUNTRY ELEVATORS Similar seasonal variations in purchases and shipments indicate that corn is shipped about as rapidly as it is purchased by elevators. The regularity of shipments from country points is caused by farm rather than by elevator storage. Oats. Extensive storage of oats at country points is suggested by the figures for oats (Table 23 and Fig. 19). The even flow of oats away from country points results from storage by elevators rather than by farmers. There was a persistent tendency -for shipments of oats to be more uniformly distributed thru the year than purchases. Up to and including September, 43 percent of the year's purchases had been made and only 34 percent of the year's shipments. Not until the end of April were purchases and shipments balanced. TABLE 23. CUMULATIVE PERCENTAGE OF YEAR'S PURCHASES AND SHIPMENTS OF OATS MADE TO END OF EACH MONTH BY ILLINOIS REPORTING ELEVATORS To end of July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Purchases, 1914-23 10 2 33 6 43 9 49 7 54 3 60 3 68 5 75 9 81 2 86 9 93 8 100 Purchases, 1923-26 8.1 29 42 7 49 5 53 4 60.1 69 2 76 80 5 85.5 93.2 100 Shipments, 1923-26 7.2 24.5 34 1 40.4 44.0 51.0 60.4 68.5 75.9 84.0 92.2 100 SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING Percent ef Total for year 25 Percent Of Total for year 25 Marketings by formers, 1923" 1926 Shipments by elevators, I92J-I926_ July Aug. 5ept. Oct. Nov Dec. Jan. Feb. Mar Apr May June Fia. 19. COMPARATIVE SEASON OF PURCHASE AND SHIPMENT OF OATS BY ILLINOIS COUNTRY ELEVATORS Purchases of oats are much more seasonal than are shipments. This indi- cates that Illinois country elevators store a large amount of this grain. Seasonal Activity of Farmers' and Private Elevators Compared The study of seasonal grain marketing naturally led to the ques- tion, Did the farmers' elevators and their patrons market their grain at harvest time to a greater or less extent than the privately owned elevators and their patrons? A comparison of the shipments of 40 privately owned elevators and 73 farmers' elevators in the central and eastern districts for the period 1923 to 1925 (Tables 24 and 25) indicates that private elevators made a larger proportion of their shipments at or near harvest time than did the farmers' elevators, and this is true for all three grains. TABLE 24. PERCENTAGE OF ANNUAL GRAIN SHIPMENTS MADE DURING SELECTED MONTHS BY ILLINOIS REPORTING ELEVATORS Year Corn November-February Oats July-September Wheat July-September Farmers' Private Farmers' Private Farmers' Private 1923-24 . . . 36.8 46.1 41.4 44.3 50.4 47.4 22.6 44.1 35.4 30.8 47.3 39.0 83.4 77.1 80.2 88.4 81.1 84.8 1924-25 Average 38 BULLETIN 324 [May, SUMMARY AND CONCLUSIONS Comparative Season of Shipment for Various Grains. The time of shipping wheat from Illinois elevators is highly seasonal. From 1923-24 to 1925-26, 70 percent of the year's shipments, on the average, were made prior to October 1. On the other hand, shipments of corn and particularly of oats are not so seasonal. During the three years studied only 44 percent of the corn was shipped from November to February inclusive, and only 34 percent of the oats from July to September inclusive. Sectional Differences in Grain Shipments. Different parts of the state show differences in season of shipment. Elevators in southern Illinois ship their wheat more uniformly than do elevators in the cen- tral and eastern parts of the state. Northern and western sections are intermediate in this respect. The production of soft wheat in the southern section and hard wheat in the central and eastern sections probably explain this difference in season of shipping, the soft wheat being held because of expectation of the greater seasonal rise which typically takes place in the price of this product. Shipments of corn from the southern half of the state tend to be concentrated at harvest time more than in the balance of the state. Shipments of oats from the northern and eastern sections of the state are more uniformly distributed thruout the year than from the southern and western sections. For the period studied, uniformity was particularly noticeable in the northeastern district, where oats are a very important crop. These variations apparently are related to differences in available storage capacity, elevators in the northern and eastern sections having larger capacity than those in other parts. Seasonal Changes in Grain Shipments. Some shifts occurred in the season of shipment between the different years. During each year of the period covered, wheat was marketed later than during the pre- vious year. A larger portion of the corn and oats shipments were made at harvest time in 1924-25 than in either of the other two years. Relatively favorable prices at harvest time apparently stimulated earlier marketing of the 1924 crops. Seasonal Changes in Grain Prices. Typically, wheat prices have advanced from August to February and then declined. Seasonal in- creases in the prices of soft wheat have averaged larger than for hard wheat when either pre-war or post-war averages are considered. Attempts to analyze the seasonal variation in corn prices are com- plicated by changes in grade. Before the war a rather regular seasonal increase took place in the price of No. 3 yellow corn at Chicago. From 1899 to 1913 the August price averaged 14 cents higher than in the previous December. The seasonal variation for the period 1920-1927 has been less marked.. Altho there was an average increase of 12 cents SEASONAL FEATURES OF ILLINOIS GRAIN MARKETING 39 between December and August, there have been wide variations between the individual years which make up this average. Seasonal variations in the price of oats have been typically small, and before the war were rather uniform from one year to the next. The average changes in price within the year indicate that storage space must be available at low cost in order to make the storage of oats profitable. From 1921 to 1927 the average increase in price of oats from August to March was only 6 cents a bushel. In spite of this, as has been noted, shipments of oats are distributed more uniformly thruout the year than are those of the other two grains. Comparison of changes in the price of oats and the opportunities for earnings on oats hedged at time of purchase by sale of futures in- dicates that from 1921 to 1926 the opportunities for earnings from storing oats between August and March, were larger when the oats were hedged. This was not true, on the average, from 1914 to 1920. Effect of Storage Facilities and of Credit on Time of Shipment. The average storage capacity of 344 reporting companies was 38,750 bushels. The elevators average largest in the northeastern and eastern parts of the state, the average in these sections being about 50,000 bushels while in the central district the average was about 40,000 and in the balance of the state from 20,000 to 25,000 bushels. Comparison of data on season of sale by farmers, compiled by the U. S. Department of Agriculture for the period 1914 to 1923, with shipment data for 1923-1926, indicates that Illinois elevators ship out corn and wheat about as rapidly as they purchase it, but that they ship oats less rapidly. The rather regular movement of corn from country elevators results from farm storage while that of oats can be attributed, to a large extent, to storage by elevators. Information obtained from 471 farmers in all parts of the state indicates that the average farm is fairly well supplied with storage space for corn but that in certain sections farm storage is not available for all of the small grains raised. The 471 farmers reported that their permanent corncribs averaged 2,848 bushels and their tight-bin storage for small grain, 2,068 bushels. Only about one-fourth of these farmers reported that lack of storage facilities was a factor in determining time of sale during any of the last five years, and about the same pro- portion reported that lack of available credit influenced the time of sale any year during the same period. In the central and eastern districts, however, the farmers indicated that available bank credit affected time of sales during a little more than one-fourth of the years. /Variations in Shipments from Two Different Types of Elevators. There were no significant differences between the season of shipping grain from private elevators and that of shipping from farmers' ele- vators, altho there was a tendency for the farmers' elevators to ship a slightly smaller percentage of their grain immediately after harvest. 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