MARKETING GRAIN AT COUNTRY POINTS. 39 



INTERPRETING MARKET INFORMATION AND SELLING FOR FUTURE DELIVERY. 



The dealer receives a vast amount of market information from 

 many sources, and to market his grain advantageously he must be 

 able to interpret these data shrewdly. He must decide whether to 

 sell his grain on track, to arrive, or consign it. If he consigns or 

 holds it in storage and hedges against his holdings by selling an equal 

 quantity for future delivery, he must know where to hedge to best 

 advantage, and assume the risk of variations between the cash and 

 future prices. 



Being constantly in contact with the markets he has ever before 

 him the temptation to speculate, either by (1) selling cash grain 

 for future delivery before it is purchased, (2) by holding his pur- 

 chases without hedging against them, or (3) by dealing directly on 

 the future market. It is only natural that a man who is daily 

 studying market conditions should sometimes feel assured of his 

 ability to forecast the future trend of price fluctuations and to specu- 

 late with a certain degree of intelligent judgment, but in most cases 

 he discovers ultimately that his knowledge has its limitation. Con- 

 ditions arise of whose possibility he was entirely unaware, or has 

 failed to consider, which change the entire trend of prices. When 

 cash grain has been sold he must depend on the farmer's delivery 

 to fill the sale. If the market is rising, farmers naturally withhold 

 their grain in the hope of obtaining better prices. The condition 

 of the roads; stress of farm work, and other circumstances^ may 

 militate against deliveries. Should the speculator hold his grain 

 at the elevator some difficulty may be encountered in disposing of 

 it when desired, as mills and other users of cash grain are not in- 

 clined to buy freely on a rising market; while if the grain is 

 consigned to a general market there may be a serious decline before 

 its arrival. 



RISKS IN STORING GRAIN. 



The risks incident to storing grain for farmers, contracting with 

 them for future delivery, and advancing money on grain purchased 

 or in store have already been discussed. The dealer must also 

 assume the risk of a car shortage rendering it impossible to ship 

 grain at the desired moment, and possibly compelling him to cease 

 buying because his elevator is filled to capacity. Possibility of 

 deterioration of the grain in storage while awaiting the arrival of 

 cars must be borne in mind. In case the dealer sells grain for future 

 shipments he incurs the risk of buyers failing to fulfill the terms 

 of their contracts. When the market has declined buyers are some- 

 times financially unable to take the grain, while others seek oppor- 

 tunity to avoid fulfilling their part of the contract by taking advan- 

 tage of some technical point in its wording. 



