NAPERVILLE, Illinois, July 2 (Reuters) - U.S. corn and soybean prices have tumbled to four-year lows and producers’ disappointment with the situation is reflected in their unusually massive stockpiles.

Farmers’ hesitation to sell product could make grain availability appear tighter in local markets, but any rallies could have farmers ready to cure supply needs, potentially limiting the degree or duration of price strength.

Survey work published by the U.S. Department of Agriculture on Friday showed June 1 U.S. corn stocks at 4.99 billion bushels, a four-year high, up 22% from a year earlier and up 7% from the 10-year average for June 1.

But 61% of those corn supplies was held on farms, the largest June 1 share since 1999 and well above the decade average of 52%. Similarly, some 48% of June 1 soybean stocks was held on farms, the largest percentage for that date since 2006 and above the 10-year average of 35%.

Total June 1 soy stocks also landed 22% above the year-ago levels and reached four-year highs, but the 970 million bushels were about 1% lower than the decade mean.

U.S. farmers have held a larger-than-normal portion of corn and soybean stocks throughout this marketing year, but that margin widened in the third quarter between March and May, suggesting farmers have been increasingly stingy sellers.

Farms also housed 61% of U.S. corn supplies on March 1, a 19-year high for the date, though the decade average is 56%. For soybeans, some 51% of March 1 supplies was on farms, a 17-year high but also a bit closer than June 1 to its decade average of 42%.

Things were much less anomalous on Dec. 1, right after the conclusion of last year’s harvest, as corn and soy stocks on farms accounted for 64% and 48% of national stocks, respectively. Decade averages are 62% and 47%.

ACREAGE RESPONSE

U.S. farmers have reduced the amount of area under corn by 3% from 2023, but they increased soybean plantings by roughly the same degree, which could further add to the soy stock build if crop yields are strong this year.

Only three major U.S. corn states recorded total June 1 stocks below the recent five-year average: Iowa, Nebraska and Kansas with respective shortfalls of 3%, 17% and 20%.

Iowa’s 2024 corn plantings are unchanged from 2023, but Nebraska’s are up 1.5% and Kansas plantings are up almost 10%, and they are the only two major states with year-on-year area increases.

Soybean plantings are less linked to the statewide stock trends, as Iowa was the only major state to cut plantings from a year ago, by a half-percent.

June 1 soybean stocks are up greatly from 2023 across most major states but remain notably off five-year averages due to the supply oversaturation between 2018 and 2020.

WHERE ARE THE STOCKS?

Relative to normal, Illinois is by far the most stuffed with corn, as 17.5% of national corn stocks was held in the No. 2 producer on June 1 compared with a five-year average of 15.6%.

Top corn producer Iowa’s June 1 stocks were 17.6% of total compared with 19.6% on average, and only Nebraska had a larger deficit from average in 2024, down 2.6 percentage points.

Kansas’ share of June 1 corn stocks was also below average, but shares in Minnesota, Ohio, Missouri and the Dakotas were between 0.5 to 1 percentage point above normal.

Minnesota held 11.2% of all June 1 soy stocks, above the 10% average. Only Ohio and South Dakota maintained a higher gap than normal, combining for nearly 15% of June 1 stocks.

Iowa, Michigan, Nebraska and Kansas were the only states accounting for smaller-than-normal portions of June 1 soybean stocks. Karen Braun is a market analyst for Reuters. Views expressed above are her own. (Writing by Karen Braun Editing by Matthew Lewis)