February 10, 1942 (19th Parliament, 3rd Session)

LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Hon. J. A. MacKINNON (Minister of Trade and Commerce):

Mr. Speaker, a few days ago the hon. member for Qu'Appelle (Mr. Perley), as reported at page 128 of Hansard, quoted the following from a Winnipeg paper:
Canadian wheat is being purchased by United States buyers fo,r shipment south of the line after the opening of navigation; that warehouse receipts are being taken by the United States buyers, and that, according to reliable authorities, the wheat is being hedged in the Chicago market.
He then proceeded to ask three questions. At that time I promised to look into the matter and bring down a reply as soon as possible. I should like to reply to these questions now.
Question 1: From whom are these United States buyers securing these warehouse receipts, since it is cash wheat?

Answer: The warehouse receipts are supplied by the seller of the grain to the buyer and are the owner's title to the grain. When grain is unloaded at any terminal elevator a warehouse receipt must be issued to the owner, and only on presentation of this receipt is he entitled to gain possession of the grain that it represents.
Question 2: Why is it being hedged in Chicago?
Answer: If this grain is being hedged in Chicago, presumably it is because the owner wishes to have it hedged there. This is purely a matter for the personal judgment of the owner and it is a fairly common practice for Canadian grain to be hedged in Chicago.
Question 3: What part did the Canadian wheat board play in these trades, and is there any possibility of this wheat coming into competition with the export of other Canadian wheat to the United Kingdom?
Answer: The Canadian wheat board has no direct knowledge of these transactions as their wheat is sold to buyers on the Winnipeg grain exchange. Because the very restricted import quota for Canadian wheat allowed to enter the United States for domestic consumption is full, this wheat will presumably stay in bond in the United States, and therefore remains a part of the visible supply of Canadian wheat and can move into export channels in exactly the same way as other wheat stored by exporters in the United States or Canada.

Topic:   REPORTED SALE TO UNITED STATES BUYERS FOR LATER DELIVERY
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