DTN: Farmers have nearly 37% more corn in on-farm storage as of June 1 than the year before, relying on their enhanced storage capacity as profitable prices remain elusive.
On June 28, USDA said national corn stockpiles stood at 4.99 billion bushels (bb), 22% more than in June 2023. Of that, 3.03 bb are stored on farms, while 1.97 bb are in commercial storage.
“We did have an opportunity for higher prices in May, but we didn’t ring the $5 bell,” DTN Lead Analyst Todd Hultman said. The July corn futures contract hit a high of $4.755, while the national average cash price only got to $4.49 during May, which is historically when a seasonal peak occurs.
Weather problems this spring may also have encouraged some farmers to hold onto more corn in the hope of bullish price development. Instead, prices slid, with July futures prices trading below $4 per bushel during the day on July 1.
“A year ago, we were still in the ballpark of $6 corn. That’s the other reason farmers are so stubborn right now. They feel like it’s gotten beat down too hard,” Hultman said, adding that many farmers’ breakeven levels are around $5 per bushel. “When you factor in inflation into the production cost mix, this is a very cheap price. Spot corn equates to like $3.10 in pre-COVID terms.”
Another indication that farmers aren’t selling: The national average basis, which measures the difference between cash prices paid to farmers and future prices, firmed between March and June, from 42 cents below the July contract to 20 cents below.
Read more from DTN here: https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2024/07/02/farmers-hold-3-bb-corn-farm-storage?referrer=NLBestOf
