South Dakota farmer Eric Kroupa recently found himself fielding numerous calls from grain dealers and ethanol plants eager to purchase the corn stored in his bins as prices approached 4-1/2-month peaks last month. While he sold a portion, Kroupa is holding out for higher bids before releasing more. Since then, prices have dipped, hovering just above the three-year lows seen in February.
“There’s a lot of corn out there but it’s sitting in the farmers’ bins and not the end-users’ hands,” Kroupa said.
Despite an abundant harvest and favorable early ratings for summer crops, many American farmers continue to withhold their grain from the market, hoping for a price increase that shows no signs of materializing. Interviews with 15 grain farmers across the U.S. Midwest by Reuters reveal a larger-than-usual volume of grain remains unsold. According to the U.S. Agriculture Department, U.S. corn inventories could hit a six-year high by September 2025.
This reluctance to sell creates uncertainty around if and when farmers will liquidate their stocks, potentially causing volatility in both cash and futures markets. Farmers who delay too long risk facing a price drop in October and November as the newly harvested grain floods the market. Buyers, meanwhile, need sufficient supplies to maintain processing and export operations through the summer.
Angie Setzer, a partner at Michigan-based Consus Ag, described the current market situation as an unprecedented economic standoff. “I’ve never seen anything like it in my life. No one’s engaged, not the farmer and not the consumer,” Setzer said.
Farmers are selling just enough to meet short-term cash needs, with some hoping adverse weather will drive up prices later in the summer. However, there are no guarantees. Three farmers told Reuters they negotiated with seed and chemical suppliers to reduce late fees, allowing them to hold onto their crop longer. Others, like Kroupa, are using the futures market to hedge against further price declines.
Commercial buyers, on the other hand, are banking on lower prices this summer due to the grain surplus. The USDA is set to update the corn stock levels in a quarterly report on June 28. As of March 1, U.S. farm-level corn stocks were just over five billion bushels, the second-highest on record for that date. These on-farm stocks represent 60.85% of the entire U.S. corn supply, the largest share since 2005.
To incentivize sales, some buyers are offering premiums for immediate delivery but are lowering prices once those needs are met. Archer-Daniels-Midland, for instance, offered a seven-cent per bushel premium for corn delivered to its Decatur, Illinois, plant by last week compared to later in the month. At its Cedar Rapids, Iowa, plant, the premium was 15 cents.
Indiana farmer and cattle producer Samuel Ebenkamp sold part of his corn during an early-May rally but is holding the rest to ensure he meets his cattle feed needs until the fall harvest. His neighbors are making similar financial decisions. “There is an insane amount of on-farm storage here,” Ebenkamp said. “It doesn’t appear anyone’s in a rush to sell.”
Despite strong demand for corn in the ethanol and feed markets, farmers are still holding onto a larger-than-normal portion of their last harvest. Dan Basse, president of Chicago-based consultancy AgResource Co., noted that while demand is solid, the challenge lies in how this demand will be met. “They are short-bought and the farmer is still long. Who is going to blink first?” Basse said.
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