Farming's Futures
By David K. Sauder
Commodity Advisor
Trade Tech, Lancaster
This week, let’s take a look at the
historical background of the
Commodities Market.
The first links between com
modities and organized commerce
are lost in the mists of antiquity,
but it is well-established that ac
tive commodity markets
operated under rules and
regulations existed m China,
Egypt, Arabia, and India 12 cen
turies before the birth of Christ.
Futures markets, as we know
them today, probably had their
roots in seasonal festials m
medieval Europe that'eventually
became year-round markets in
areas associated with particular
commodities. Perhaps those that
most closely resemble today’s
markets were those developed by
the shoguns of Japan starting in
the late 17th century. They in
corporated many elements found
in today’s futures markets.
In the early 1800 s, futures
trading took hold in England and
other European countries. By 1848,
Chicago became the crossroads for
buyers and sellers of grain, and an
early U.S. commodity exchange
was born.
Chicago Mercantile Exchange
. Butter and egg merchants soon
felt a need for a central market
place, and in 1898 the Chicago
Butter and Egg Board,-forerunner
of -the Chicago Mercantile Ex
change, evolved from the Chicago
Produce Exchange (1874). The
Board set as its objectives: “1. the
establishment of daily market
quotations on butter, eggs, and
othr products; 2. the provision of
general information regarding the
market for such commodities; 3.
the location of a convenient place
to buy and sell commodities, and 4.
the machinery to quickly adjust
business disputes among its
members.”
The advent of effective
refrigeration made it possible to
store eggs during periods of heavy
supply in the spring. These eggs
were then used in the less
productive fall and winter seasons.
Time contracts were written to
help producers and processors in
their marketing programs. These
time contracts were the ancestors
of futures contracts.
In 1919, members of the Butter
and Egg Board formed com
mittees to obtain data concerning
futures trading in grain, cotton,
and other commodities. Later that
year, the Board’s name, was
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changed to the Chicago Mercantile
Exchange and a Clearing House
was set up to handle futures
transactions.
Prior to World War n, the Ex
change initiated trading in
potatoes, onions, and hides; but
wartime price controls stopped
virtually all futures trading.
Government price-support policies
and changing technology after the
war sent C.M.E. members looking
for other industries that might use
futures advantageously in their
financial planning. Turkeys and
forzen eggs were added, and
turkey trading volume was
significant in the ‘sos.
The modem expansion of the
Exchange, however, began in 1961
with the introduction of the frozen
pork belly contract. After a slow
start, bellies became one of the
most actively traded commodities
in the world, and the cornerstone of
the Exchange’s highly successful
meat complex.
The first successful futures
contract for a live, nonstorable
commodity was introduced in 1964
for live cattle. It was so well
accepted from the start that a
contract in live hogs was listed
early in 1966, and a feeder cattle
contract was added in 1971.
' The phenomenal growth of the
C.M.E. is indicated .by its trading
volume, which increased 31 times
over from 250,000 contracts traded
in 1964 to more than 6 million in
1973, 1975, and 1976 and a record
7,878,247 in 1977. ,The price of a
membership (“seat”) rose from
$3,000 in 1964 to a record $200,000
early in 1978.
To achieve certain objectives
and solve certain incipient
problems associated with this
growth, the membership voted in-
November 1975 to implement a
plan of merger and reorganization.
Under this plan, the C.M.E. as a
division, and the Associate Mer
cantile Market Division (A.M.M.)
was formed. The 500 C.M.E.
members may trade in live and
feeder cattle, frozen pork bellies,
and live hogs as well as all of the
commodities listed on its two
divisions.
We’ll continue our look at the
history of the commodities market
next week.
Send your questions about
futures trading to Fanning’s
Futures, Lancaster Farming
Newpaper, Box 366, Lititz, PA
17543.
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New officers and committee represent jves
of the Northeastern Weed Science Society are:
front row Past President Ray Taylorson;
Editorial Committee Representative Ben
Coffman; Vice President James Graham;
Public Relations Committee Representative
Carolyn Goulding; Sustaining Membership
Committee Representative Barbara Emerson;
N.Y. hosts Weed Science symposium
NEW YORK - “The Big Apple"
played host to the 36th Annual
' Northeastern Weed Science
Society meeting. Nearly 400
participants gathered at the
Sheraton Centre in early January.
The three-day meeting focused
on 154 scientific papers, presented
in separate sessions including
agronomy; horticulture; tree and
small fruit; industrial, forestry, &
conservation; ornamentals; turf;
and ecology, physiology, & soils. A
special Herbicide-Environment
Update Symposium featured
speakers from USDA, and Dow
Chemical Co. discussing the latest
findings on 2,4-D and its effects on
human health.
President Ray Taylorson, of
USDA-SEA-AR, opened the
general session by explaining how
long term weed control can be
achieved after breaking weed seed
'dormancy. Keynote speaker
Menashe Horowitz, of the
Agricultural Research
Organization, followed with a
review of his research findings on
weed control in both Israel and the
U.S.
Awards Chairman Garry
Schnappinger of Ciba-Geigy
presented awards to two member
scientists for then* dedicated
service and outstanding con
tribution. Honored with the'
Distinguished Member Award
were Hugh J. Murphy, a professor
at the University of Maine, Orono;
and Walter A. Centner, a plant
physiologist for the USDA-SEA
AR. Beltsviiie. MD.
The Award of Merit
established m recognition of
meritorious service to NEWSS
members nearing retirement or
who have retired was presented
to Robert D. Shipman, a professor
at Penn State, University Park.
The best paper and graduate
student presentation awards,
funded by BASF Wyandotte
Corporation, were presented to the
following:
Best Paper Award ($200) -
Prasanta C. Bhowmik, University
of Massachusetts, Amherst. Title:
“Differential Growth Response to
Temperature Between Two
Biotypes of Chenopodimn album."
Runner-Up ($100) - J.S. Ebdon,
University of Rhode Island,
Kingston. Title: “Chemical
Control of Spurge and Other
Broadleaf Weeds in Turf grass.
Graduate Student Presentation
Award ($200) - Tom Harris,
University of Maryland, College
Park, (co-author R.L. Kittle).
Title: “Fall Panicum and Giant
Green Foxtail Interference in
Soybeans.” Runner-Up ($100) -
Barbara J. Hook, University of
Maryland, College Park, (co
author S. Glenn). Title:
“Agronomic and Physiological
Activity of Acifluorfen Influence
byMefluidide.”
New officers for 1982 include:
President Stephan Dennis,
Stauffer Chemical Co., Dayton,
M.H. EBY, INC.
Manufacturer of All Aluminum Truck Bodies
Livestock, Grain & Bulk Feed
U1&LII3I Refrigerated Trailers
Sales & Service
Distributor of
Blue Ball. Pa.
Lancaster Fannin:
Saturda;
and Wv jnce Society lerica
Representative Dean Linscott. Second row,
President-Elect Tom Watschke; President
Stephan Dennis; Secretary-Treasurer-Elect
Dick Ashley; and Secretary-Treasurer Russ
Hahn. Not pictured was Research Coordinator
Richard Henne.
N.J.; President-Elect Tom Wat
schke, Penn State, University
Park; Vice President James
Graham, Monsanto, St. Louis, Mo;
and Secretary-Treasurer Dick
Ashley, University of Connecticut,
Storrs, CT.
Committee Representative
appointed by Dennis are: Awards,
Ray Taylorson, USDA-SEA-AR,
Beltsviiie, MD; Weed Science
Society of America Represen
tative, Dean L. Linscott USDA
SEA-AR, Department of
Agronomy, Cornell University,
Ithaca, NY; Editorial, Ben Coff
man, USDA-SEA-AR, Beltsviiie,
MD; Sustaining Membership,
Barbara Emerson, Union Carbide
Agricultural Products Co., Inc.,
Research Triangle Park, NC;
Public Relations, Carolyn
Colliding, Gibbs & Soell, Inc., New
York, NY; and Research Coor
dinator, Richard Henne, Campbell
Institute for Agricultural
V«uearch, Napolean, OH.
For copies of the NEWSS
Proceedings, which contains
copies of the papers presented at
the meeting, contact Russ Hahn,
Department of Agronomy, Cornell
University, Ithaca, NY 14853.
Next year’s meeting is scheduled
for the Grossinger Hotel & Country
Club, Grossinger, NY, January 4-6,
1983.
Aluminum Livestock Body
717-354-4971
February 6,1982—819