US grain surplus pressures corn market

An agricultural economist from the University of Missouri Extension, Ben Brown, expressed surprise at the U.S. corn stocks as of September 1. According to the USDA’s latest Quarterly Grain Stocks report, an additional 200 million bushels of corn have contributed to what is already a record supply for the new crop marketing year. This surplus continues to weigh on corn prices as the market progresses.

Brown highlighted a decline in corn used for livestock feed. “Not only are we feeding fewer cattle due to a reduced U.S. supply and no cattle imports from Mexico for feeding, but we’re also seeing price pressure in the feed sector from grain sorghum and wheat. The larger wheat crop will only intensify this trend,” he explained. This reduced demand for corn as feed creates additional challenges for the market.

Lower corn prices, however, offer livestock producers an opportunity to secure feed at more affordable rates. This could partially offset the challenges posed by the oversupply, though the overall market situation remains complex due to the surplus.

The USDA reports that at the end of the old crop marketing year, the U.S. had 1.5 billion bushels of corn, 317 million bushels of soybeans, and 2.1 billion bushels of wheat in stock. Corn and soybean stocks are lower than a year ago, while wheat stocks are higher. The USDA’s next supply, demand, and production estimates are scheduled for October 9, but a potential federal government shutdown may delay their release.

Tags: corn, prices, USA, stocks