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Farmers hold out for higher bids amid corn glut, leading to market standoff

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South Dakota farmer Eric Kroupa received a flurry of calls from grain dealers and ethanol plants last month, eager to buy the corn stored in his bins as prices hit 4.5-month peaks. While he sold some, Kroupa is holding out for higher bids.

Prices have since dropped and are now just above the three-year lows posted 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 low prices, many U.S. farmers continue to stockpile their crops, waiting for better offers. This trend persists even though grain supplies are ample and early ratings of summer crops are the best in years.

According to Reuters interviews with 15 grain farmers across the U.S. Midwest, a larger-than-normal volume of grain remains unsold. The U.S. Agriculture Department projects that by September 2025, U.S. corn inventories will reach a six-year high.

The timing of when farmers will liquidate their stocks is uncertain, potentially causing volatility in grain prices in both cash and futures markets.

There is a risk that waiting too long could lead to a flood of newly harvested grain this October and November, further depressing prices. Meanwhile, buyers need sufficient supplies to keep processing plants running 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 it in my life. No one’s engaged, not the farmer and not the consumer,” Setzer said.

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Many growers sold just enough this spring to cover short-term cash-flow needs, hoping for adverse weather this summer to trigger price rallies.

However, nothing is guaranteed. Some farmers have negotiated with seed and chemical suppliers to reduce late fees, allowing them to hold onto their crops longer. Others, like Kroupa, use the futures market to hedge against further price declines.

Commercial buyers are betting on lower prices this summer due to the grain glut, analysts said. The USDA will update the amount of corn on farms in a quarterly stocks report on June 28. As of March 1, U.S. corn supplies stored at the farm level stood at just over 5 billion bushels, the second-highest on-farm stocks on record for that date, representing 60.85% of the entire U.S. corn supply, the largest share since 2005.

Some buyers are trying to entice farmers by offering premiums for immediate supplies but are lowering prices once those orders are filled. Archer-Daniels-Midland (ADM.N) recently offered a 7-cent-per-bushel premium for corn delivered to its Decatur, Illinois, processing plant by Sunday versus later in the month. At ADM’s Cedar Rapids, Iowa, plant, the premium is 15 cents.

Indiana crop and cattle producer Samuel Ebenkamp emptied one corn bin during an early-May rally but opted to hold the rest to ensure his cattle feed needs are covered until the fall harvest. “There is an insane amount of on-farm storage here,” Ebenkamp said. “It doesn’t appear anyone’s in a rush to sell.”

Farmers are holding onto a larger-than-normal amount of their last harvest while demand for corn has remained relatively solid. “Ethanol margins are still relatively good. Feed margins are good. So there is demand out there.

And as you look at the export sector, it’s going to be improving,” said Dan Basse, president of Chicago-based consultancy AgResource Co.

However, how this demand will be met this summer remains unclear. “They are short-bought and the farmer is still long. Who is going to blink first?” Basse said.

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