Late-season storms have soaked ripe soybeans from Memphis, TN, to northern Louisiana over the past two weeks, enhancing mold and fungus growth and causing some beans to rot in their pods, grain traders said.
Now those soybeans do not meet the market’s crop quality guidelines, Reuters reports, so farmers that sold soybeans through forward contracts are facing a penalty because they cannot deliver beans with the quality required, they said.
“The export market’s not in a good position to take a lot of the off-grade quality this year because of the issues we’re having without the Chinese (market),” J.O. Norman, vice president at Oakley Grain in North Little Rock, AR, which operates six elevators in the region, told Reuters.
Elevators across the Delta have cut bids for soybeans to discourage a flood of farmer deliveries until demand improves.
Normally, grain elevators and shippers can compensate for damaged soy by blending it with higher-quality beans to meet export specifications that require less than 2% damage. But high-quality beans are in very tight supply in the Delta this year because weak export prices are discouraging Midwest elevators from shipping them south.
Read the full report here.
