CHICAGO, June 17 (Reuters) - South Dakota farmer Eric

Kroupa received a flurry of calls from grain dealers and ethanol

plants asking to buy the corn locked away in his bins when

prices neared 4-1/2-month peaks last month.

He sold some, but is waiting for buyers to up their bids to

sell more. Prices have since eased and are hovering just above

three-year lows posted in February.

"There's a lot of corn out there but it's sitting in the

farmers' bins and not the end-users' hands," Kroupa said.

After stockpiling crops for much of this season due to low

prices, many farmers in the world's largest corn-producing

nation continue to shun buyers despite few signs that prices

will improve. Grain supplies are ample and early ratings of

summer crops are the best in years.

A larger-than-normal volume of grain remains unsold,

according to Reuters interviews with 15 grain farmers across the

U.S. Midwest. By September 2025, U.S. corn inventories are

expected to reach a six-year high, according to the U.S

Agriculture Department.

Uncertainty around if and when farmers will liquidate their

stocks could make for choppy grain prices, both in cash and

futures markets.

Farmers risk waiting too long to sell as a flood of newly

harvested grain is likely to drag down prices this October and

November. Buyers, aware the harvest is coming, still need enough

supplies to keep processing plants running and exports flowing

this summer.

An economic stare-down between growers and grain buyers is

taking shape, said Angie Setzer, a partner at Michigan-based

Consus Ag.

"I've never seen anything like it in my life. No one's

engaged, not the farmer and not the consumer," Setzer said.

Many growers sold just enough this spring to cover

short-term cash-flow needs, Setzer said. Some are counting on

adverse weather this summer to trigger price rallies, though

nothing is guaranteed.

Three farmers told Reuters they convinced seed and chemical

suppliers to reduce late fees, allowing them to hang on to their

crop. Others, including Kroupa, use the futures market to hedge

the risk of further price declines.

Meanwhile, commercial buyers are banking on lower prices

this summer due to the grain glut, analysts said.

USDA will offer an update of how much corn sits on farms in

a quarterly stocks report on June 28.

U.S. corn supplies stored at the farm level stood at just

over 5 billion bushels as of March 1, the second-highest on-farm

stocks on record for that date, according to USDA. On-farm

stocks represented 60.85% of the entire U.S. corn supply, the

largest share since 2005.

Some buyers are trying to pry grain away from farmers by

offering premiums for immediate supplies to fill near-term

needs, but are lowering prices once those orders are filled.

Archer-Daniels-Midland ( ADM ) on Friday offered farmers a

7-cent-per-bushel premium for corn delivered to its Decatur,

Illinois, processing plant by Sunday versus later in the month.

At ADM's Cedar Rapids, Iowa, plant, that premium is 15 cents.

Such offers of a few extra pennies per bushel can amount to

thousands of dollars per grain transaction.

Indiana crop and cattle producer Samuel Ebenkamp emptied one

corn bin with sales during an early-May rally, but opted to hold

the rest. He'll sell more if prices rally again, but he's

holding tight to ensure his cattle feed needs are covered until

the fall harvest.

His neighbors are making similar financial calculations, he

said.

"There is an insane amount of on-farm storage here,"

Ebenkamp said. "It doesn't appear anyone's in a rush to sell."

Farmers are still holding a larger-than-normal amount of

their last harvest while demand for corn has been fairly solid,

analysts said.

"Ethanol margins are still relatively good. Feed margins are

good. So there is demand out there. And as you look at the

export sector, it's going to be improving," said Dan Basse,

president of Chicago-based consultancy AgResource Co.

How they fill that demand this summer is unclear, Basse

said. "They are short-bought and the farmer is still long. Who

is going to blink first?"

(Editing by Caroline Stauffer and Rod Nickel)