US has insufficient storage for large grain harvest

The storage capacity is now a constraint for grain farmers in the United States as they harvest a record crop of grain, corn, and soybeans from the land. Especially the storage and logistics of soybeans are under pressure due to this. Wheat and corn can benefit from this. America is preparing for an exceptionally large harvest of wheat, corn, and soybeans, states Cobank in a report on grain logistics. In particular, wheat and corn benefit from strong exports and favorable transportation costs, while soybean sales lag behind due to the decline in Chinese demand. The sales of corn and wheat in export markets are historically strong. Low prices, a weak dollar, and low transport costs create significant foreign demand. Export sales are 94% (corn) and 41% (wheat) higher than last year. Soybeans, on the other hand, are experiencing a significant decline: export sales are 51% smaller than a year ago. The absence of Chinese purchases weighs heavily, while other markets do not compensate for this. Transshipment companies raise rates Due to the record harvest and uneven export flows, storage capacity at farmers, traders, and transshipment companies is under pressure. Wheat and corn are prioritized for storage and shipping because those markets are more stable and have less risk. Soybeans are more often stored on the farm or in temporary storage. Transshipment companies are raising their rates for the limited storage space or refusing batches of soybeans that are difficult to market, the report states. With lower rates, the railroads support exports to Mexico and the Gulf region. About two-thirds of the exports to Mexico occur over land. More wagons are also being moved in that direction. This affects, among other things, the transport capacity to the northwest.