North Dakota corn bushels from 2016 could affect corn prices

MarketsAssociated Press

North Dakota farmers have sold a lot of corn, but the amount of crop left after last year's record production could wreak havoc on local prices.

"We've already moved a significant amount out of North Dakota for the crop year," said John Miller BNSF Railway's group vice president of agricultural commodities. "We've been moving it steadily since last fall."

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The U.S. Department of Agriculture estimated in March that 215 million bushels of corn were being stored on farms in the state, The Bismarck Tribune reported .

North Dakota State University crop economist Frayne Olson said if farmers are holding on to corn in hopes of a price increase, it could lead to lower prices being paid. Local cash price is determined by the local basis, which is a premium subtracted from or added to the futures price.

Dale Ihry, executive director of the Corn Council, said reports show that farmers used the first price hike to get rid of crop that they had stored because of last year's high yields.

"By all accounts, there's still a lot of corn out there," he said.

Ihry said the USDA is expected to release another report Friday on grain stock.

Local elevators say a rush may occur as farmers try to make space in the bin for 2017 crops.

Meanwhile, BNSF railway said it has plenty of resources available to handle the demand.

"We are near record number of shuttles running across the system," Miller said, as Minnesota, North Dakota, parts of South Dakota and Nebraska had record corn yields.

Shuttles have 110 cars that can carry about 440,000 bushels.


Information from: Bismarck Tribune,