The Rise in Wheat One of the most important pieces
of news the papers have had to record in the past week is the rise in the price of wheat. The 50 cents and less a bushel that was threatening Middle-West farmers with ruin not more than a month ago has become 66 cents in Chicago, and British and Canadian prices are moving propor- tionately. The factors responsible for the rise are various. Among them are a poor spring crop in northern U.S.A. and Canada and some European countries, but most particularly the belief that Russia has come to the end of her exports for this season. There may well be disillusion in store there, for Russia's intentions are not always proclaimed to the world, but there is no doubt that the world situation is sub- stantially better than it was two months ago or was expected to be now. Similar, though much smaller, improvements are reported in the case of cotton and oil (though Shell and Royal Dutch have both passed their interim dividends). If there is really any reason to believe that commodity prices are beginning to turn upwards, the general outlook will be substantially changed. The banks in America, for example, with their funds tied up in farm mortgages on which it would be hardly worth while to foreclose, would soon find their frozen money turning liquid. That would mean an easier credit situation, with lower discount rates and a stimulus to business enterprise generally. The market reports of the next week or two will show how far optimism is justified.
