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ADM offers free deferred pricing to entice soybean

deliveries

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Farmers are storing soybeans in hopes that prices will

improve

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Processors raise basis bids to encourage crop sales

By Tom Polansek

CHICAGO, Oct 17 (Reuters) - Archer-Daniels-Midland ( ADM )

, one of the world's biggest grain merchants, is offering

incentives for U.S. farmers to deliver soybeans to one of its

major processing facilities this month as low prices have slowed

selling by growers, a grain trader and a company employee with

knowledge of the matter said.

In an unusual offer during the peak of autumn harvesting,

ADM is allowing farmers to deliver soy to its facility in

Decatur, Illinois, and set the final sale price later, without

paying for storage, the two sources said.

In exchange, ADM will take ownership of the soybeans,

enabling it to process the crops, they added.

A company spokesperson declined to comment.

Bumper harvests have been pressuring crop prices and farmers

are reeling from high costs for fertilizer and other inputs.

What's more, China, the largest soybean importer, has responded

to President Donald Trump's trade tariffs this year by

turning to South America, depriving U.S. farmers of their

primary market.

FARMERS PUT CROPS IN STORAGE

Many farmers are putting soybeans into storage in hopes of

getting better prices down the road, growers and analysts said,

leaving fewer supplies available to major U.S. processors.

ADM's offer, known as free deferred pricing, will be

available to farmers until the end of October, and those who

participate have until September 2026 to set a sale price,

according to the company employee.

"That tells me they need beans, that they don't have enough

beans to keep their process running," said David Isermann, a

farmer in Streator, Illinois, who will not take part in ADM's

program.

Farmers said ADM's offer was unusual because processors

typically have access to plentiful supplies during harvest time.

This year, farmers had agreed to sell less of their crop

than normal heading into harvest season, Miranda Wamsley, ADM's

vice president of producer origination, said in an interview

last month. She did not provide specific amounts.

Some farmers said they normally market about half of their

expected crops by the time harvest begins but had sold about 20%

or less this year.

"Because the prices are low, everybody is storing grain on

the farm and saying: 'No, you're not getting my grain until

prices go up,'" said Steve Pitstick, a farmer in Maple Park,

Illinois.

Commercial grain firms still need crops to process into

products such as vegetable oil.

In September, U.S. soybean crushings jumped to their fourth

highest level for any month, according to National Oilseed

Processors Association data released on Wednesday.

FARMERS STRUGGLE TO MAKE MONEY

Deferred pricing is potentially attractive to farmers

harvesting big crops because they otherwise must figure out

where to put supplies if they do not want to sell.

Storage space is limited on farms and costs a few cents per

bushel per month at grain elevators. Crops also can be damaged

in storage.

U.S. Agriculture Secretary Brooke Rollins said last week that

the Trump administration could provide an aid program for

soybean farmers once the two-week-old government shutdown ends.

"An alarming number of farmers are financially under water,"

Zippy Duvall, president of the American Farm Bureau Federation,

told Trump last week in a letter seeking payments for farmers.

Although markets remain weak, processors like ADM recently

raised their basis bids, or the difference between futures and

cash prices, to encourage crop sales, analysts said.

The soybean basis on Wednesday improved by a nickel per bushel

at Decatur, a grain processing hub, after rising by 20 cents

last week.

Hoping for better prices, several farmers said bids could

rise further if growers find ways to store crops without

agreeing to deferred pricing.