House is holding out for no sales below the parity price. Parity on 

 wheat in May was $l.'}k- a bushel. Regardless of how this dispute comes 

 out, sales of wheat for feed are not likely to be large until corn 

 supplies are greatly reduced and the price of corn is considerably 

 higher. If we raise a good corn crop this year, these conditions are 

 not likely to develop befdre the summer of 19^3* 



If farmers can find the storage and the wheat is not too high 

 in moisture* a large proportion of this year's crop will likely go into 

 the loan. If this happens, the experience of the past two years would 

 suggest that the open market price would be below the loan during the 

 harvest seasons, but subsequently would rise to above the loan level and 

 then fluctuate considerably. However, the difficulty of obtaining stor^ 

 age space, the higher cash price and damp grain may cause more wheat to 

 be sold. The larger the supply of "free" wheat, the longer the rise to 

 the loan level may be delayed. It is interesting to note that in both 

 of the past two years, the high price on wheat has come around the end 

 of the calendar year. This was the usual seasonal high for wheat under 

 free markets. Many farmers who had a little profit in their loan wheat 

 lost it by not selling out at that time* This illustrates the importance 

 of being familiar with usual seasonal movement, which still seems to 

 operate even though the loans are of dominant importance. For grains 

 these seasonals are discussed and analyzed in Circular 51^* published 

 just a year ago by the College of Agriculture. 



In spite of the very large total carryover of wheat, the 

 situation is somewhat different for the soft red winter class. Our 

 national supply of this will be about 220 million bushels compared with 

 an average of 237 million bushels for the past ten years. Comparable * 

 figures for hard red winter are 667 million against ^12 million and 

 for hard red spring, ^15 million against 19^ million. Under these con- 

 ditions some premiums on soft wheat are quite likely. 



