U.S. grain glut leads to storage shortage

Some American wheat farmers are not only going to lose money on every bushel they harvest this month, many won’t have a proper place to store it.

U.S. grain silos still hold surpluses from last year. Combined stockpiles for major crops – corn, soybeans, wheat and sorghum – are the biggest for this time of year since 1988. With demand slowing and output rising, space will get tighter, especially for wheat, which is the first one harvested. Some growers may dump grain in parking lots or vacant buildings.

While farmers expanded storage in recent years, that’s been undermined by global crop surpluses and a strong dollar. Once the world’s biggest wheat exporter, the U.S. saw its shipments in the year through Tuesday drop to the lowest since 1972.

With inventories up 30 percent and expected to swell further, the glut may only get bigger. Global supply, including production and inventories, will exceed consumption by the most ever in the year that ends in June 2017, with the harvest expected to be the second-highest on record, the International Grains Council said May 26.

Read more: Bloomberg


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