Northwest Arkansas Times from Fayetteville, Arkansas on September 18, 1974 · Page 6
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Northwest Arkansas Times from Fayetteville, Arkansas · Page 6

Fayetteville, Arkansas
Issue Date:
Wednesday, September 18, 1974
Page 6
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Northwest Arkansas TIMES, Wed., Sept. 18, 1974 rAYlTTIVILLE, ARKANSAS Facts On Futures ^ By WYLIE PARKER And LAVERN HOLIF1ELD A,G. EDWARDS SONS Crop estimates released last week by th USDA tended to confirm the viability of their , August .forecasts by now show. ing much change. The estimates did not take into account the damage from the Septem' ' ber frosts which occurred in the : northern grain belt nor the damage to the sugar cane crop · from last weekend's hurricane. 1 Consequently, there should be ': further reductions in some estimates on the October report. This year more than ever, preliarvest forecasts are sus- ; pect. Only when the combines are in the field will we know -"- the extent of the damage caused by this season's most unusual combinaton of variations in moisture and temperature. More frost damage is still possible. . Using almost any producton statistics one wishes, a glance at supply demand balance tables, for the coming year continues to indicate extremely tight supply demand tightness and high prices. The second reason is the real and psychological conceris which ace present in the world today because the economic and financial difficulties of the industrialized countries. CROP ESTIMATE The September crop estimat- Washington News In Brief' Energy Policy Of White House Unchanged By R I C H A R D J. iMAI.OY TIMES Washington Bureau · WASHINGTON Here is n cs trimmed the estimate. From balances' and circumstances under ordinary extremely bullish ones in corn and soybeans. The weekly export 6ales data suggests heavy foreign commitments. Yet, USDA claims they are inflated and there is little cause for concern. They are more aware of the situation than their public statements would suggest, but hope to be able to talk down some of the foreign business by asking buyers over. seas to coluntarily restrict their purchases. More people are also looking at the acreage prospects for the 19V5 crops and see little basis for expecting ble small decline in acreage. committed to grains for next year. Some even expect a possible small decline inacreage. From a long term stand point, this has a very disconcerting effect when the low world reserves are taken into account. PRESSURE SEEN All this would suggest upward pressure on the corn and soybean complex markets. It hasn't been there in recent weeks. If it is to come, past exprience says it will come during the harvest period This ·' could be the case this year since this period will produce poor yield rtporls, farmer holding, seasonal buying results from the fact that informed commercial interests usually want to buy when they expect supplies to be available and prices to be under pressure. This normally is not the case prior to harvest and is one reason why the markets have been weak. What sometimes happens is that all buyers wait for harvest and then find themselves competing with one another to get the supply and end up driving prices up at a time when they normal- spring wheat Canada also came reports of a disappointingly small crop. Argentina has withdrawn as a seller of grain which makes the short term export position of the U.S. more avorable. That country is reported to be lacking ample storage f o r its crops, however, and may he forced to be a weak seller later on. Export business continues to be good. The wheat market has broken out of its trading range but has not broken sharply. With the possibility of stronger corn and soybean markets in the period ahead, one must also think about the long side of wheat. The prognosis for the corr market outlined above is based more on soybean experience than corn experience since we have very few situations anw where similar to what has hap pcned this year in corn. Consc quently, we would be more cau tions in expecting strength corn than the soybeans since they are two different com cornmodities. Frost damages are still with us antl should al ways be kept in mind when tempted to go short. A bullish crop report, fros damage and threats, and a be tcr oil market helped soybeai prices advance, this week. W believe that the complex maj be able to show more strengt than corn in the short run. Th product picture is a strange one Meal is in surplus supply an yet is underprised when com pared with substitute ingred ierils. Over the long pull th will lighte and coul roundup of news items gathered in the nation's capital by the ·Uf of the TIMES Washington ireau. There's a new man in the ivilc House but the energy Hey of the Ford Administra- on is pretty much the same that followed by the Nixon .(ministration. In terms of the cost of gaso- le to run automobiles, the rice of electricity a n d fuel 1 and natural gas to heal omcs, that policy spells bar ews for the consumer who is .ready fighting a losing battle and normal pressures. This latter soybean shortage meal statistically help prices. OIL TIGHT Oil is still relatively tight bi has price problems relative t the competition. It, too, will b tight statistically because of th soybean situation. While at leas one product has t o - b e in shoi supply if a soybean bull mark* is to develop, it is difficult a this time to say which prduc is tighter. The two markets wi probably engage in a see-sa battle for dominance in th months ahead. Livestock movements will h heavy this fall and should ten to keep prices under pressur While fed beef will com mand a wide premium ove ion-fed because of the supp disparities, there is little reaso on this basis to be extreme Dullish on cattle. Recent ir provement in grass conditioi should take some edge off h grass catte marketings b they will still be heavy and tend to dominate the livestock markets. ly go down. The point is this: if prices are going to go up in response to the 'Bullish" statistical outlook they had belter do it in the next few months. If Ihey do, how high will they go? The statistical picture would suggest much higher. However we currently do not believe this is a good bet. There are two reasons for this doubt. One is an observation gleaned by observing many markets in many commodities over many years. This observation is that prices seldom respond as bullishly as they should to the statistical gainst inflation. That policy, expounded by reasury Secretary William :mon when he was energy czar :ul now articulated by Federa nergy Administrator John C Sawhill calls for permitting energy costs to rise ill order o stimulate new production and also to curb demand. Under that policy, the price of gasoline rose from around 36-ccnts per gallon to about 60- cents per gallon during the past year. Sawhill is also pressing for- ivard with a new plan which will cause gasoline prices, to surge even higher. He wants to end the dual pricing system, under which oil from existing wells must be sold at about half the price allowed to be charged for oil from new wells and oil coming from abroad. He is also pressing Congress to end the 20-year-old Federa" policy of regulation of natura' gas prices. If the industry couk charge higher pricies, it woulc be spurred to step up its hunt for new supplies of natural gas Sawhill argues. In his latest move, Sawhill s launching a campaign to coir ince state public utility commissions that the y should be more generous with the rate ncrcascs sought by electric and gas companies which do business in their states. Sawhill claims profits now permitted jublic utilities are not large jnough to permit the firms to finance needed expansion. Sawhill has scheduled major conference here Sept. 1920 to be attended by state public utility commission officials and representatives of the utility industry where the states will be pressed to permit bigger profits for the industry. Homeowners are already complaining about the fuel surcharges which have been adder to their monthly electric frills by utilities in many parts of the country. SUGAR SUBSTITUTE -- Jncle Sam is still not convinced ,hal it is safe for the food In- luslry to use cyclamates as a sugiir substitute. The food line! Drug Adminis- ration (FDA) announced a new study it tins just completed was Inconclusive"' on the question of whether cyclamates can cause cancer in humans. The FDA banned the use of cyclamates as a sweetncr in 1969 on the basis of tests which showed it might cause cancer. Abbott Laboratories, which manufactures cyclamatcs asked for reconsideration but FDA said its new studies have failed to give the substance a clean bill of health. FARM POPULATION -- The long decline in the U.S. f a r m - populatinon seems to be coming to an end, the Agriculture De partmeht has announced.' The Agency said about 9.5 nilliotis Americans now live on a r m s . Farm population declined at an annual rate of inly 0.8 per cent between 1970 ,nd 1973 compared to an annual lecline of about 5 per cent the 1900's, according tpingrd luring the 1960's, according to he USDA. GOLD AUDIT -- Mary 3rooks, director of the U.S. Mint, will conduct i\ highly-puo licizcd count of the gold stored at Fort Knox later this month, The gold "audit" will bo conducted September 23, with congressmen and members of the press invited to look on. Rep. Phil Crane, R-I11., a right-wing conservative, apparently fearing that someone hac been making off with the taxpayers gold, requested the special count, A total of 14V million ounces of gold, valued at |6,2 billion indcr the fixed government jricc of $'12.22 per ounce, is stored in the Fort Knox vaults. The law required an annual mdll of the gold, which is undertaken jointly by "irce government agencies. Never leforc, however, have these ludifs been conducted in public. BIRTHDAY PARTY: An increasing number of l o c a l communities lire gearing up to participate in America s 200th birthday party during 1876. A total of 1.297 cilies and towns across the nation have }ecn designated Bicentennial Communities because they hava organized local bodies to plan for the birthday fclc. The TIMES Is On Top of The News Seven Days a Week Any prices problems or supplies with corn will inspire more sow liquidations and add to the hog slaughter. From an aggregate stand point, meat demand has realy not been that bad in recent months. In view of the expected rise in unemployment and other economic trends, this could change in the months ahead and remove some of the ability to rise from the markets. Long term supply*prospects favor more strength for - hogs and bellies than cattle but the economic pressures and cattle marketings could temper the IJleV SjriUUlU LU U I U biausiivui i i i n i J N K i u i g a i-uuiu ieui]^ci picture after several years of I bullish response next year. Energy Experts Say Nation Will Adapt To Shortages By FREDERICK L. HERNS TIMES Washington Bureau WASHINGTON -- If last winter was had, this winter may be worse. That is the concensus of a panel of energy experts who this week mentioned the probability this winter of a severe natural gas shortage, the possibility of a strike by coal miners arid the lingering threat of another Arab oil embargo. But, amidst the gloom, the seven experts struck an optimistic note: the nation may be able to adapt to the worsening . energy conditions. · and there's ' no need to push the panic button. "We'll go into this winter with · a greater public awareness of the problem," noted Geoffrey H. Bye, a representative of the Asiatic Petroleum Corporation. That awareness, and the realization instilled last winle: , a m o n g most consumers that fuel conservation is essential, . comes at a time when experts believe the following conditions will take place: SUPPLIES · --The natural gas supplied this winter to local utility companies will be curtailed to a greater extent than it was last winter. --What federal officials claim is a more than nine million ton coal shortage will intensify especially if a threatenec United Mine Workers strike .' becomes a reality. --Fuel oil demand will increase 10 per cent. In addition, the possibility ol another Arab embargo is a cause of considerable concern. "Unless progress is made ir troop disengagement, they)] use the embargo again," warned John Buckley, vice president of th- Northeast Petrol: eum Industries, Inc. Such conditions caused most of the experts who participated In the forum conducted by the American Enterprise Institute, a nonprofit public information group, to characleriEe the coming winter as an especially lifficult one. ' ' T h e situation involving latural gas availability is nol good," a Federal Power Com mission (FPC) spokesman sail in reference to what could be .he winter's most serious prob lem. The spokesman, Joseph C Solters, stated that 17 of thi 42 major pipeline companic: have been unable to full; supply their utility companies. But officials appear confiden that the nation can adapt ti the natural gas deficiencies am other problems in the month ahead. TO AFFECT INDUSTRY Sollcrs pointed out that resi dential consumers will be th last to be direcUy affected b the gas shortfall, since the FPi pans to interrupt service on], to industrial users. Thus, plant could shut down but the jobles employes will remain warm a home. The FPC may this winte allow power and energy trans fers between electric utilities ii d i f f e r e n t regions. Industria users have been urged to rever to other forms of energy, am consumers again will get askei to follow a poicy of moderatio. in fuel use. Oil inventories, according I the Federal Energy Adminis tration, arc up slightly, goo news to the SO per ent of th n a t i o n ' s consumers whos homes arc heated with oil. So, the experts agreec though conditions may be bac the nation -- and its conser vation-minded residents -- ma this time be able to cope wit them. It's heartening to note tha our efforts at conservation ar not going unrewarded. Federa Energy Administrator Joh Sawhill promises that fJhrisl mas lights won't be dimmed i Americans keep up a policy o moderation. JCPenney Save 20% on bras and girdles. Sale $ 2 to 9 60 Reg. 2.SO to $12. Come in and save now on our stock of bras and girdles. From total support to the subtle shaping you want for today's styles. 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