US Farmers Shun Buyers, Cling to Unsold Corn as Prices Slump

by P.j. Huffstutter and Karl Plume (Reuters) South Dakota farmer Eric Kroupa received a flurry of calls from grain dealers and ethanol plants asking to buy the corn locked away in his bins when prices neared 4-1/2-month peaks last month.

After stockpiling crops for much of this season due to low prices, many farmers in the world's largest corn-producing nation continue to shun buyers despite few signs that prices will improve. Grain supplies are ample and early ratings of summer crops are the best in years.

A larger-than-normal volume of grain remains unsold, according to Reuters interviews with 15 grain farmers across the U.S. Midwest. By September 2025, U.S. corn inventories are expected to reach a six-year high, according to the U.S Agriculture Department.

Some buyers are trying to pry grain away from farmers by offering premiums for immediate supplies to fill near-term needs, but are lowering prices once those orders are filled.

Archer-Daniels-Midland (ADM.N) on Friday (June 14, 2024) offered farmers a 7-cent-per-bushel premium for corn delivered to its Decatur, Illinois, processing plant by Sunday versus later in the month. At ADM's Cedar Rapids, Iowa, plant, that premium is 15 cents.

Such offers of a few extra pennies per bushel can amount to thousands of dollars per grain transaction.

Farmers are still holding a larger-than-normal amount of their last harvest while demand for corn has been fairly solid, analysts said.

"Ethanol margins are still relatively good. Feed margins are good. So there is demand out there. And as you look at the export sector, it's going to be improving," said Dan Basse, president of Chicago-based consultancy AgResource Co.

How they fill that demand this summer is unclear, Basse said. "They are short-bought and the farmer is still long. Who is going to blink first?" READ MORE

Excerpt from Alberta Farmer: Bridging the production gap will fall to oilseed crops, likely canola and sunflower seeds.

“But agronomic constraints mean that the resulting growth will not be enough to plug the gap, and that means vegetable oil demand starts to fall back on soybeans.”

That could flood the feed market with meal. Soybeans are less than 20 per cent oil. They’re mostly meal, and the production of enough soybeans to meet oil requirements could leave a glut of soy meal on the table, let alone any meal surplus from increased canola production.

“Very broadly, that means you will have protein meal supply outstripping demand at quite a significant rate.”

Hanson doesn’t think that imbalance will get as bad as implied by the mandates because it’s unlikely all of those mandates will be met, he said. Still, it will be enough to exert influence on feed markets.

“You’re going to have protein meal growing faster than demand, whether it’s quite fast or very fast … And feed operations are likely to benefit from lower meal prices in the next five to 10 years or so.” READ MORE