South Dakota farmer Eric Kroupa received a flurry of calls from grain traders and ethanol plants asking to buy corn corraled in his bins as prices hit 4-1/2 month highs last.
He has sold some, but is waiting for buyers to increase their bids to sell more. Since then, prices have fallen and are hovering just above three-year lows recorded in February.
“There’s a lot of corn around, but it’s in farmers’ bins and not in the hands of end users,” Kroupa said.
After hoarding 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 of improving prices. Cereal supplies are abundant and early assessments of summer harvests are the best in recent years.
A larger-than-normal volume of wheat remains unsold, according to Reuters interviews with 15 wheat farmers in the U.S. Midwest. By September 2025, U.S. corn supplies are expected to reach a six-year high, according to the U.S. Department of Agriculture.
Uncertainty about whether and when farmers will liquidate their supplies could make grain prices uncertain, both in cash and futures markets.
Farmers risk waiting too long to sell, as a surge in freshly harvested grain is likely to drag prices lower in October and November. Buyers, mindful of the impending harvest, still need enough supplies to keep processing plants running and exports flowing this summer.
An economic confrontation between grain farmers and buyers is taking shape, said Angie Setzer, partner at Michigan-based Consus Ag.
“I’ve never seen anything like this in my life. Nobody is engaged, not the farmer or the consumer,” Setzer said.
Many growers sold only enough this spring to cover short-term cash flow needs, Setzer said. Some are counting on this summer’s adverse weather to trigger a price recovery, although nothing is guaranteed.
Three farmers told Reuters they had persuaded seed and chemical suppliers to reduce delay charges, allowing them to keep their crops. Others, including Kroupa, use the futures market to hedge the risk of further price declines.
Meanwhile, commercial buyers are banking on lower prices this summer due to a grain glut, analysts said.
The USDA will offer an update on how much corn is on farms in its quarterly inventory report on June 28.
U.S. corn inventories stored at the farm level stood at just over 5 billion bushels as of March 1, the second-highest on-farm inventories on record for that date, according to the USDA. On-farm inventories represented 60.85% of the entire U.S. corn supply, the largest share since 2005.
Some buyers are trying to wrest grain from farmers by offering premiums for immediate supplies to meet short-term needs, but are lowering prices once orders are filled.
Archer-Daniels-Midland on Friday offered farmers a premium of 7 cents per bushel for corn delivered to its Decatur, Illinois, processing plant by Sunday versus the end of the month. At the ADM plant in Cedar Rapids, Iowa, the premium is 15 cents.
Such offers of a few cents more per bushel can amount to thousands of dollars per grain transaction.
Indiana crop and livestock producer Samuel Ebenkamp emptied a bin of corn with sales during the early May rally but chose to keep the rest. He will sell more if prices rise again, but he is holding out to ensure the livestock’s food needs are covered until the autumn harvest.
His neighbors are making similar financial calculations, he said.
“There’s a crazy amount of storage on the farm here,” Ebenkamp said. “It doesn’t look like anyone is in a hurry to sell.”
Farmers are still saving more of their latest crop than normal, while demand for corn has been fairly solid, according to analysts.
“Ethanol margins are still relatively good. Feed margins are good. So the demand is there. And if you look at the export sector, you can tell it’s improving,” said Dan Basse, company president consultancy AgResource Co, based in Chicago.
It’s unclear how demand will fill this summer, Basse said. “I’m short on purchases and the farmer is still long. Who will blink first?” (Editing by Caroline Stauffer and Rod Nickel)
