The world's greatest corn-producing country has seen many farmers hoard harvests for most of this season owing to poor pricing; yet, there are few indications that prices will rise. (Photo : by Sean Gallup/Getty Images)
The world's greatest corn-producing country has seen many farmers hoard harvests for most of this season owing to poor pricing; yet, there are few indications that prices will rise. There's a plentiful supply of grains and the strongest early assessments of summer crops.
According to interviews conducted by Reuters with fifteen grain producers throughout the United States, a more significant than usual amount of grain still needs to be sold. Midwest. The US Agriculture Department projects that corn stockpiles in the US will hit a six-year high by September 2025.
Grain prices might be erratic in both the cash and futures markets due to uncertainty on whether and when farmers would sell off their holdings.
This October and November, a glut of recently harvested grain is expected to drive down prices, so farmers run the danger of holding off on selling for too long. Buyers must ensure that processing companies can maintain operations and exports throughout the summer, even if they know the harvest is approaching.
Growers and grain buyers are engaged in an economic stare-down, according to Angie Setzer, a partner at Consus Ag, located in Michigan.
According to Setzer, many producers just made enough money this spring to meet their immediate financial demands. Although nothing is sure, some people are depending on unfavorable weather this summer to spark price surges.
According to economists, commercial purchasers are anticipating cheaper prices this summer as a result of the grain surplus.
In a quarterly stocks report, the USDA will provide a current estimate of the amount of maize that is on farms on June 28.
Record Maize Stockpiles Prompt Buyers to Offer Premiums for Immediate Supply
According to USDA, as of March 1, the amount of maize stockpiled on American farms was just over 5 billion bushels, which was the second-highest amount of on-farm stockpiles ever recorded for that date. The percentage of maize produced in the United States that came from on-farm stocks was 60.85%, the highest since 2005.
By paying premiums for quick supply to meet short-term demands, some buyers are attempting to entice farmers away from their grain by cutting prices when those orders are satisfied.
In contrast to later in the month, Archer-Daniels-Midland gave farmers a 7-cent-per-bushel bonus for maize supplied to its Decatur, Illinois, processing plant by Sunday. The premium at ADM's factory in Cedar Rapids, Iowa, is fifteen cents.
Offering a few more cents per bushel, like this, can result in grain transactions worth thousands of dollars.
During an early May rally, Samuel Ebenkamp, an Indiana agricultural and livestock producer, chose to keep the remaining maize after selling out of one bin. If prices rise again, he'll sell more, but for now, he's holding on to ensure his cattle feed requirements are met until the autumn harvest.
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