By PJ Huffstutter and Karl Plume
CHICAGO (Reuters) – South Dakota farmer Eric Kroupa received a flurry of calls from grain traders and ethanol plants looking to buy his barreled corn as prices neared 4-1/2-month highs last month.
He sold some, but is waiting for buyers to raise their bids to sell more. Prices have since eased and are hovering just above three-year lows posted in February.
“There’s a lot of corn out there, but it’s sitting in farmers’ bins and not in the hands of end users,” Kroupa said.
After harvesting the crop for most of this season because of low prices, many farmers in the world’s biggest corn-producing country continue to shun buyers, despite some signs that prices will improve. Grain supplies are plentiful and early summer crop estimates are the best in years.
A larger-than-normal volume of grain remains unsold, according to Reuters interviews with 15 grain farmers across the US Midwest. By September 2025, US corn inventories are expected to reach their highest level in six years, according to the US Department of Agriculture.
Uncertainty about when and if farmers will liquidate their stocks can lead to volatile wheat prices in both cash and futures markets.
Farmers risk waiting too long to sell as a flood of newly harvested grain is likely to reduce prices this October and November. Buyers, aware that the harvest is coming, still need enough supplies to keep processing plants running and exports flowing this summer.
An economic shift between growers and grain buyers is taking shape, said Angie Setzer, a partner at Michigan-based Consus Ag.
“I’ve never seen anything like this in my life. Nobody is engaged, neither the farmer nor the consumer,” Setzer said.
Many growers sold enough this spring to cover short-term cash flow needs, Setzer said. Some are counting on inclement weather this summer to drive up prices, though nothing is guaranteed.
Three farmers told Reuters they convinced seed and chemical suppliers to lower late fees, allowing them to depend on their produce. Others, including Kroupa, use the futures market to hedge the risk of further price declines.
Meanwhile, commercial buyers are looking for lower prices this summer because of the glut of wheat, analysts said.
The USDA will provide an update on the amount of corn on farms in a quarterly stocks report on June 28.
U.S. corn supplies held at the farm level stood at just over 5 billion bushels as of March 1, the second-highest farm stocks on record for that date, according to the USDA. Farm stocks represented 60.85% of the entire US corn supply, the largest share since 2005.
Some buyers are trying to pry grain away from farmers by offering premiums for immediate supplies to meet short-term needs, but cutting prices once those orders are filled.
Archer-Daniels-Midland on Friday offered farmers a premium of 7 cents a bushel for corn delivered to its Decatur, Illinois processing plant by Sunday versus later in the month. At ADM’s Cedar Rapids, Iowa plant, that price is 15 cents.
Such offers of a few extra pennies per bushel can add up to thousands of dollars per grain transaction.
Indian crop and livestock producer Samuel Ebenkamp emptied a bin of corn for sale during a rally in early May, but decided to keep the rest. He will sell more if prices rise again, but he is trying to ensure his cattle feed needs are covered until the fall harvest.
His neighbors are doing similar financial calculations, he said.
“There’s an insane amount of conservation on the farm here,” Ebenkamp said. “It doesn’t look like anyone is in a rush to sell.”
Farmers are still holding a larger-than-normal amount of their last harvest, while demand for corn has been solid, analysts said.
“Ethanol margins are still relatively good. Food margins are good. So there’s demand there. And as you look at the export sector, it’s going to improve,” said Dan Basse, president of Chicago-based consultancy AgResource Co.
How they meet that demand this summer is unclear, Basse said. “They are bought short and the farmer is still long. Who will blink first?”
(Editing by Caroline Stauffer and Rod Nickel)
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