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.