The Ambassador in Uruguay (Dawson) to the Secretary of State
[Received 8:40 p.m.]
403. For basic information re Uruguayan wheat situation see despatches 6960, 7335, 7396 and report 169, June 24.64 No official estimate production new harvest available but heavy rains in July and tendency to plant more linseed make present outlook uncertain. Prevailing price level for linseed is double that for wheat. Total wheat receipts June and July from US 17,487 tons and from Argentina 4386 tons.
Normal 25,000 tons monthly consumption has been reduced by 30 percent (17 in milling and 13 in lower sales of bread) so minimum 17,000 tons monthly needed from abroad August through November. Political situation makes further reductions in consumption impossible. Lower percent milling of grain was demanded in recent lockout of bakers and Government may be forced to permit some improvement in flour. Total needed for August-November is 68,000 tons and if 46 more are received from Argentina final theoretical deficit would be 22. Embassy therefore believes Uruguay will need minimum 20,000 tons from US for October and November delivery. Embassy recommends such wheat be purchased and not borrowed against future harvest.65