Increasing accumulations of butter and lack of confidence among members of the trade were the principal factors in bringing about extremely weak conditions and radical declines in all markets during the early part of the week ending July 29. The resulting lower prices attracted a speculative demand which was largely instrumental in causing equally radical advances during the latter part of the week. The prices at the close of the week, however, hovered near the same levels as at the opening, and conditions, although not so extremely weak because of lighter stocks, were equally unsettled.
Since early in July receivers have been burdened with heavy accumulations of receipts because of the curtailed storing demand, and the strength of the market has been maintained by the hope that consuming outlets would become larger, that receipts would decrease more rapidly, or that exporters would take considerable quantities. When there appeared to be no immediate outlet for the accumulating stocks, dealers slashed prices and cleared away a large part of the accumulations.
SPECULATIVE INTEREST DEVELOPS.
The lower prices, however, brought forth a speculative interest which was so keen that prices reacted practically to the level on Monday. But with the higher prices buyers again disappeared, the market became very unsettled, and some price reductions ensued.
The strengthening factors are an excellent consumptive demand, possibilities of export and the improbability of any considerable imports. A shortage in stocks of butter in foreign markets makes it probable that considerable butter will be exported and improbable that the imports will be large. Aside from the possibility of exports and imports, the enormous quantity of butter going into consumption is a major factor in the possible trend of the markets.
Receipts at the four markets since Jan. 1 show a surplus of some 58,000,000 lbs. over the same period a year ago. Of these receipts, nearly 11,000,000 lbs. in excess of last year was stored. Import and export figures for the first six months of the year show an excess of exports over imports of 2,365,000 lbs. During the corresponding period in 1921 there was an excess of imports amounting to 6,139,000 lbs. Deducting the 11,000,000 lbs. which was stored in excess of last year and the decrease of 8,000,000 lbs. due to foreign trade, the apparent increase in consumption since Jan. 1, 1922, amounts to some 39,000,000 lbs.
On the other hand, while larger quantities have gone into consumption there are some operators who are bearish and claim that prices will have to rule higher next winter than last winter in order to allow a fair profit on present storage stocks, and that this condition naturally would reduce consumption. It is claimed also that production may continue comparatively heavy, making large outlets necessary. Some also point out that during our winter months the countries in the Southern Hemisphere have their season of flush production and that imports from those countries are a possibility.
Notwithstanding the fact that the markets at present are weak and unsettled, and receivers generally desire to keep current receipts moving, most of those owning storage butter have confidence in holding it at its present cost.
| WHOLESALE PRICES OF BUTTER AND CHEESE, WEEK ENDING JULY 29, 1922. | |||||
|---|---|---|---|---|---|
| [Cents per pound.] | |||||
| CREAMERY BUTTER (92 score). | New York. | Chicago. | Philadelphia. | Boston. | San Francisco. |
| Monday | 35 | 33 | 36 | 36 | 37¼ |
| Tuesday | 34 | 32½ | 35 | 35½ | 37 |
| Wednesday | 34½ | 32½ | 35 | 35½ | 37 |
| Thursday | 35½ | 34 | 36 | 36 | 37¼ |
| Friday | 34½ | 33½ | 35½ | 35½ | 37 |
| Saturday | 34 | 33½ | 35½ | 35½ | 37 |
| Average for week | 34.68 | 33.17 | 35.50 | 35.67 | 37.08 |
| Previous week | 36.08 | 34.08 | 36.67 | 36.67 | 39.37 |
| Corresponding week last year | 42.67 | 41.42 | 43.08 | 43.50 | 39.62 |
| AMERICAN CHEESE (No. 1 fresh twins) | New York. | Chicago. | Boston. | San Francisco.[[10]] | Wisconsin. |
| Monday | 20½–21¼ | 18½–19 | 21½–22½ | 19¼ | 18¼ |
| Tuesday | 20¼–21 | 18½–19 | 21½–22¼ | 19¼ | 18½ |
| Wednesday | 20¼–21 | 18½–19 | 21½–22¼ | 20 | 18½ |
| Thursday | 20¼–21 | 18½–19 | 21½–22 | 19¾ | 18¼ |
| Friday | 20¼–21 | 18½–19 | 21½–22 | 19¾ | 18 |
| Saturday | 20¼–21 | 18½–19 | 21 –21½ | 19¾ | 18 |
| Average for week | 20.67 | 18.75 | 21.68 | 19.62 | 18.26 |
| Previous week | 21.13 | 18.83 | 22.00 | 19.21 | 18.71 |
| Corresponding week last year | 21.00 | 20.44 | 21.42 | 22.08 | 21.04 |
| Wholesale Prices of Centralized Butter (90 score) at Chicago. | |
|---|---|
| [Cents per pound.] | |
| Monday | 32¼ |
| Tuesday | 31¾ |
| Wednesday | 32¼ |
| Thursday | 33 |
| Friday | 32¾ |
| Saturday | 32¾ |
| Average | 32.46 |