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Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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This growing corn pile is located west of MaxYield Co-op, Everly, Iowa. (Photo courtesy of Chad Meyer, MaxYield Cooperative)

Grain elevators and ethanol plants across the Midwest are shortening dump hours because they are running short of space for corn. Lines are long and corn piles are popping up throughout the Midwest. Most contract options currently are cash only, which is painful at current cash prices for farmers who need to sell corn due to lack of space on the farm.

Harry Bormann, grain team leader at MaxYield Cooperative in West Bend, Iowa, told DTN that roughly 15% of the corn harvest remained the past week across their territory. MaxYield Co-op has 20 locations serving central, eastern and western Iowa. "Corn moisture, with the help of recent sunshine, is moving closer to 18%. We have locations that are tight on corn space. Belmond just finished filling their 1.5-million-bushel bunker and is now piling corn in other areas. Other locations are either loading a train or shuffling bushels amongst locations to make more room. The Everly (Iowa) corn pile shown in the photo (accompanying this column) has over 800,000 bushels on it as of Thursday," said Bormann.

"We are preparing to put corn in our bunker in Garner for the first time in several years," said Bormann. "Even with harvest winding down across our area, MaxYield as a whole took in more than 1 million bushels of corn just on Wednesday, Nov. 2. We've had several days of receiving more than a million bushels of corn this fall."

Cory Tryan, the grain department manager who is in charge of grain marketing and logistics at Alton Grain Terminal Hillsboro, North Dakota, a farmer-owned shuttle loading facility, told me that they went to cash only last week for corn.

"We are a little different than most shuttle loaders in that we don't pile grain; we use the 4 million (bushel) space we have and pre-book freight with sales to turn it over during harvest as best we can," Tryan said. "We've got the contracts pretty well covered, and once they wrap up the harvesting, we probably won't see any more nearby cash with these carries to sell it for later delivery. We will stay cash only throughout November because of the markets nearby and space constraints.

"We did go to regular hours this week until next harvest and have been closing Saturday and Sunday (started that a couple weeks ago) to save some space for the start of the following week. The weekends are used to catch up drying the staged wet corn. We filled up midweek with corn but are loading a couple bean shuttles Thursday and Saturday that will give us a couple days of dumping corn early next week. Then three corn shuttles will start spotting by Thursday. By then everyone we'll be all but done, so space will start stretching out."

Tryan told me that there are some piles out on farms that farmers will have to pick up within the next month or so and core a few bins. "A few years ago, we saw corn left in the field over the winter, and it dried down to 15.0 moisture or less in the field and the test weights came up 2 pounds or more by the first of April," said Tryan. "There was some cob loss, but the drying and low-test-weight discounts the previous fall they would have been paying, so it worked well. Like you said, it was a nice winter back then. They did some of this two years in a row up here. This year it'll all come off by mid next week. We had a high-quality row-crop harvest that broke previous yield records."

Another elevator manager in North Dakota told me that it was a "zoo" in his area. He said their elevators dumped 400,000 bushels a day (nearly 8 million bushels in October) until a week ago when they filled up. He told me they were closed for the week ending Nov. 4 and may not reopen for trucks until the middle of the upcoming week and will hopefully have room for 10 more days, if the volume remains heavy. He said due to the "huge" corn crop, space is running out and they are cash only right now. He said he expects the trend to continue to at least the end of the year.

CASH CORN PRICE WEAK

Farmers have not been selling much corn unless they are out of space on the farm. Some farmers are leaving their corn in the field, but will likely harvest it at the end of the month, especially since the current winter forecast is calling for above-average snowfall in much of the Midwest. An elevator manager in central North Dakota told me that farmers did not expect to harvest their largest corn crop in history. He said farmers are now piling corn in their farm yards because the flat price and basis by itself are at such "cheap" levels and some had not made contracts for fall delivery. North Dakota grain bins were already overflowing with wheat and also soybeans, which produced a record harvest as well.

Shuttle loaders who ship to the Pacific Northwest report that basis levels delivered to the PNW have dropped dramatically since Oct. 1. BNSF shuttle basis delivered to the PNW for the first half of November was at +88Z at the beginning of October and is currently at +52X. The CP shuttle basis was at +73Z and is currently at +46Z. Tryan told me that nearby is still all about the soybean program for the most of the PNW. He said there is "still more corn out here wanting a home than demand or need for it, especially delivered PNW. Exporters tell us their capacity in the PNW is covered through mid/late December."

For the week ending Nov. 4, the DTN national average corn basis was at 43 cents under December futures and is running nearly even with the minimum DTN five-year average at this time, versus the five-year average of -23 and the maximum five-year average of -10. DTN's National Corn Index ended the week at $3.06. DTN Analyst Todd Hultman noted that December corn continues to trend sideways, and prices are probably "paralyzed" until at least Tuesday, the day before Wednesday's Nov. 9 WASDE report.

Tryan told me, "We'd like to see higher cash prices to get the farmers back into the black again; those net incomes are showing reds yet." That sentiment is likely shared by every U.S. farmer right now.

Here is a link to current number of bushels piled as temporary or emergency storage by federally licensed grain elevators: http://www.fsa.usda.gov/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(AG/BAS)

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