4 



% 



-5- : " , . ; 



and that the carryover next October will be large, probably in the 



neighborhood of 5^0 million bushels. However, unless we have a better 

 than average corn crop this year, the carryover of corn will likely be 

 reduced to normal levels by October 19^3' The ever-normal granary will ■ 

 then be empty of corn. But we still have a large reserve of wheat — 

 perhaps ^4-00 million bushels — which could well be used for feed. 



Effects of price ceilings - Price ceilings have been estab- 

 lished during the past nine months on more and more commodities. 

 Ceilings on prices of fats and oils applied last fall were the first to 

 affect the market for important Illinois farm products. The ceiling on 

 crude soybean oil of 11-5. cents limits fluctuation in soybean prices 

 largely to those associated with fluctuations in soybean meal. It is 

 interesting to note, hov;ever, that currently the nominal price of soy- 

 bean oil is lit cents a pound, or ^ cent below the ceiling price. One 

 explanation for this is that users of the product are consuming 

 inventories, because, with a fixed price, there is no need to carry 

 stocks to protect against the effect of possible price advances. 



The general price ceiling has now been in effect for about a 

 month and a half, and apparently the ceilings have been applied v/ithout 

 serious objections. Some interests which are being squeezed are seelcing 

 adjustments. VTholesale prices have declined slightly in the past month, 

 and tem.porarily the battle against inflation is being won. 



Ceilings were fixed by the general order on prices of both pork 

 and beef at wholesale and retail. The reactions of the markets for hogs 

 and cattle to these ceilings were quite different, and this difference 

 has raised m.any questions In farmers' minds. 



In spite of liberal receipts, prices of hcgs have strengthened 



since the ceilings were esta.blished. Currently the situation can only 



be characterized as strong. The apparent reason for this strength is 



that the demand for the supply in excess of the hogs needed to supply 



Government orders is very strong. All interests among the packers battle 

 for their share of this supply. This keeps the price of hogs high in 



■-- ' — ^^^^njiiiggiilll ^ — _^ 



