By PJ Huffstutter and Karl Plume
CHICAGO (Reuters) – South Dakota farmer Eric Kroupa received numerous calls from grain traders and ethanol plants eager to purchase his stored corn as prices approached 4-1/2-month highs last month.
He sold some but is holding out for higher bids before selling more. Prices have since softened and are now just above the three-year lows recorded in February.
“There’s plenty of corn out there, but it’s staying in farmers’ bins and not reaching end users,” Kroupa commented.
After harvesting most of this season’s crop due to low prices, many farmers in the world’s largest corn-producing nation continue to resist selling, despite indications that prices may improve. Grain supplies are abundant, and early summer crop forecasts are the best in years.
A larger-than-usual volume of grain remains unsold, according to Reuters interviews with 15 grain farmers across the US Midwest. By September 2025, US corn inventories are forecasted to hit their highest level in six years, according to the US Department of Agriculture.
Uncertainty about when and if farmers will sell their stocks could lead to volatile prices in both cash and futures markets.
Farmers risk waiting too long to sell, as a surge of newly harvested grain is likely to depress prices this October and November. Buyers, aware of the upcoming harvest, still need sufficient supplies to keep processing plants operational and exports flowing this summer.
An economic standoff between growers and grain buyers is emerging, said Angie Setzer, a partner at Michigan-based Consus Ag.
“I’ve never seen anything like this in my career. Neither the farmers nor the consumers are engaged,” Setzer noted.
Many growers sold enough this spring to meet short-term cash flow needs, Setzer explained. Some are banking on adverse weather this summer to boost prices, though that is not a certainty.
Three farmers told Reuters they persuaded seed and chemical suppliers to reduce late fees, allowing them to rely on their stored produce. Others, like Kroupa, are using the futures market to hedge against further price declines.
Meanwhile, commercial buyers are anticipating lower prices this summer due to the surplus of corn, analysts said.
The USDA will provide an update on farm-level corn stocks in a quarterly report on June 28.
U.S. corn supplies held by farmers totaled 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 accounted for 60.85% of the total US corn supply, the largest share since 2005.
Some buyers are attempting to entice grain away from farmers by offering premiums for immediate supplies to meet short-term needs, then reducing prices once those orders are fulfilled.
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 premium is 15 cents.
Such offers of a few extra cents per bushel can amount to thousands of dollars per grain transaction.
Indiana crop and livestock producer Samuel Ebenkamp sold a bin of corn during a rally in early May but decided to hold onto the rest. He will sell more if prices rise again, but he is ensuring his cattle feed needs are met until the fall harvest.
His neighbors are making similar financial decisions, he noted.
“There’s a significant amount of stockpiling on farms here,” Ebenkamp said. “It doesn’t seem like anyone is in a hurry to sell.”
Farmers are still holding a larger-than-normal portion of their last harvest, while demand for corn has remained strong, analysts said.
“Ethanol margins are still relatively good. Food margins are good. So there’s demand there. And looking at the export sector, it’s expected to improve,” said Dan Basse, president of Chicago-based consultancy AgResource Co.
How they will meet that demand this summer is uncertain, Basse stated. “They are short on purchases, and the farmer is still holding. Who will blink first?”
(Editing by Caroline Stauffer and Rod Nickel)