Biggest U.S. Corn Stockpile Since 1988 Seen Pushing Prices Lower

June 26, 2015 08:31 AM
Biggest U.S. Corn Stockpile Since 1988 Seen Pushing Prices Lower

U.S. corn inventories are forecast to rise to the highest in almost three decades after two straight years of record harvests, cushioning livestock and ethanol producers against crop losses after excessive rain in June.

Domestic stockpiles as of June 1 probably climbed 18 percent to 4.557 billion bushels, according to a survey of 27 analysts by Bloomberg News before a government report due Tuesday. That would be the highest for the date since 1988. Bigger supplies will push prices down 21 percent by September, according to AgResource Co.

Adding to the glut, the U.S. Department of Agriculture forecasts that world inventories will jump 13 percent to a 27- year high before North American farmers start harvesting this fall. Expanding stockpiles are providing a buffer after too much rain threatened some Midwest crops. Monsanto Co., the world’s largest seed company, signaled June 24 that low corn prices are likely to persist beyond 2015.

“We are in an oversupplied global market,” Jeff Hainline, the president of farm and grain-elevator consultant Advance Trading Inc. in Bloomington, Illinois, said by telephone June 24. “Carryover is stored in farmer bins, and they are getting scared they held the corn past when they should have sold.”

Corn futures for September delivery on the Chicago Board of Trade rose 2.2 percent to $3.795 a bushel at 10:50 a.m. Prices, which are down 14 percent in the past 12 months, could drop to as low as $3 by September, Chicago-based researcher AgResource forecasts.

Midwest Rains

Parts of the Midwest received three times more rain than usual in June, according to government data. July temperatures, when corn is forming viable kernels on each ear, are at least five times more important than June rainfall in determining U.S. yields, according to AgResource.


“Rain in June has little correlation with final yields, as July and August weather are the most important determinants for corn,” Bill Tierney, the chief economist at AgResource, said on June 24 by telephone.

The USDA will release its update on grain stockpiles on June 30 at 3 p.m. in Washington. Domestic inventories on March 1 rose 11 percent from a year earlier, above the 8.6 percent increase expected by analysts surveyed.

“Farmers were still holding as much as 35 percent of last year’s production on June 1,, which is the most in five years,” said Dustin Weiner, the vice president of grain marketing at Ames, Iowa-based Farmers Cooperative Co., the largest in the biggest producing state. “We are looking at record crop potential this year in Iowa. Every time the market rallied this year, the farmer has been willing to sell, and that will get more intense as crops continue to develop.”



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Spell Check

vernal, UT
7/11/2015 09:21 AM

  We can now see how bogus USDA numbers are. As for me, I won't give them any planting intentions, crop yields or anything else. All of these numbers go to the CME traders and only shoot the farmer in the foot . . .

Mesa, AZ
6/29/2015 01:10 PM

  There are indeed farmers who have inventory. Maybe not in your neck there Floating but I've spoken with growers in ND TX and other parts that are still holding grain in hopes the price goes up.

Floating Farmer
Bloomington, IL
6/29/2015 01:58 AM

  1." Corn inventories going to rise to highest levels in three decades", what a lie!!!!!!!!!!!!!!!!!!!!!!!! I farm in central Illinois and my bins have been empty and corn sold since early March!! I also asked several other farmers and they too have zero corn in their bins!! Where in the Hell are you getting this propaganda from? Oh let me guess The good ole USDA!!!!!!!!!! On a different note go rent a plane and fly over central Illinois and while your at it the rest of the Midwest and tell me record crops!!!! Get your butt out into the field and look at these waterlogged crops!!!!!!!!!!!!!!!!!! Maybe once you see how bad the midwestern crop looks and you will do a story follow-up!! Also, rain in June does have correlation to final yield if that rain either prevents a farmer from planting a crop or it kills that crop!!!! I was told by a fellow farmer last Thursday that the Illinois River has a rotten smell lately and it's not a fish smell!! That smell is from beautiful cornfields being ruined from flood waters of the Illinois River!! This crop is now rotting in the River!!!!!!!!!!!!!!!!!!!!!I can hardly wait till Tuesday, so I can hear the pack of lies the USDA will tell!!!!! They will do everything possible to de-rail this current bull market!!!


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