The U.S. is bracing for a record grain harvest totaling 21.5 billion bushels of corn, soybeans, and grain sorghum this fall.
The bumper crop arrives during a period of heightened uncertainty surrounding the future of the U.S.-China trade relationship. It all means grain storage and transportation logistics will be much more complicated than usual.
CoBank’s Knowledge Exchange said grain storage space will be extraordinarily tight this fall, with grain merchandisers charging higher fees due to limited capacity and strained infrastructure.
While grain elevators stand to benefit from buying cheaper basis and capturing wider carries in the futures markets, the profit opportunities aren’t risk-free. “Among the top 12 corn-producing states, the U.S. is facing a 1.4-billion-bushel shortage of upright grain storage this year, with elevators relying on bunkers and ground piles.”
This year’s shortage is in stark contrast to last year, when the top corn-producing states had 361 million bushels of excess storage.
