Relationship of Grain Stocks and Marketing Behavior

Farmers, merchandisers and end-users are faced with the challenge of allocating stocks of grains and oilseeds throughout the marketing year. Farmers want to obtain the best price subject to storage costs and storage constraints. Merchandisers want to assemble crops, provide storage services and supply end-users with steady quantities. Storage is available and reported at the farm level and across off-farm locations. Percentages marketed by farmers are also reported, but not until the end of the marketing year. Thus, there is information about the physical location of crops and its ownership by farmers. Factors are examined that explain the storage and marketing behavior of farmers and by the entire supply chain. Price expectations are examined, but are dominated by strong seasonal patterns in disappearance and marketings. A disparity between on-farm and off-farm disappearance is identified, the latter being intractable to quantify. A disparity between marketings and on-farm disappearance suggests a large portion of off-farm stocks are owned by farmers, potentially creating storage constraints at off-farm locations.