Brazilian corn crop revised to 134.8 mln tons

We are entering a 24/25 crop with very different biannual profiles. A summer crop with a surprising reduction in planted area, which further confirms the increase in soybean area, which should make the first half of the year quite tight in terms of domestic regional supply. On the other hand, a 2025 second crop that has renewed optimism for planting and suggests a good recovery in comparison to the 2024 second crop, which saw area and production cuts due to the weather. The configuration of excellent domestic demand for next year, together with the seasonal presence of exports, suggests a year of healthy average prices for producers and greater attention from consumers. After highs in the second half of the year, the market is still focused on the result of export shipments and the producer’s trading decisions.

The planting of the 2024/25 Brazilian summer crop appears to be in perfect condition. In some states, it is even more advanced due to the smaller area and good planting conditions. There was still some expectation that planting in later regions would react to the recent price increase, with producers deciding to keep summer corn and not switch to soybeans. Now, the Center-South region shows a reduction in planted area of 11.6% compared to the already discreet area of 2023/24, being one of the largest percentages in history for a summer area cut. The reasons are:

– Difficulty obtaining credit, which is expensive and limited;

– High production costs compared to market prices at the time of the planting decision;

– Private financing, barter, and liquidity for soybean contracts;

– Fear of worrying effects of a possible La Niña in the climate for South America;

– Better liquidation prices for soybeans.

Thus, Rio Grande do Sul and Santa Catarina lead the national cuts, as does the summer crop in Bahia. The other point of this reduction in acreage refers to the increase in the share of silage in the composition of planting. It is not possible to define at this time, but if we had 40/45% in previous crops, we can believe that this will increase to over 50% in the South of the country in the 24/25 season.

In the Southeast, many areas are being switched to beans, which should soon be transformed into second-crop corn. Many producers are emphasizing the condition of soybeans in the summer and corn in the second corn crop also due to liquidity and private financing. In the Midwest, the summer area is more limited to Goiás, a state that is also recording regional area cuts, for the same reasons. Thus, the entire summer crop in the Center-South region is falling again, now to 24 mln tons, with bets that the excellent weather conditions at this time and the concentration on more technologically-managed crops will result in better average yield.

For the 2025 second crop, we have noticed a more positive environment for planting. The recent sharp regional increases, the incidence of greater demand due to the emergence of ethanol industries, the excellent development of soybeans, the normal planting window for the second crop, and more affordable seed prices for a second crop contribute to the planting decision. However, as a priority, there are no major options for winter planting, such as wheat, cotton, perhaps sesame in some isolated areas. These crops do not compete with corn in terms of area volume. If exports in 2025 begin to increase, and liquidity starts to generate good business, planting can be accelerated. So far, almost 60% of seeds for the 2025 second crop have been sold. We believe that by February we will have good numbers for acreage.

An increase in the second crop area, which is actually a recovery, is now projected at 4.3%, with a production potential of 96.33 mln tons for 2025. In Matopiba, some delays in soybean planting in Maranhão and Piauí are still a concern regarding the volume of area to be planted in the 2025 second crop. However, the region is motivated by the emergence of two new ethanol plants, which, added to the export demand plus the regional demand in the northeast, tends to be a good combination for the liquidity of regional sales, opening space for sorghum as an alternative as well.

For the national crop, we now project 134.8 mln tons, against 125.6 mln tons in the current crop, considering that in 2024 there were significant production losses in the second crop and that these losses should not be present in 2025.

Meanwhile, the domestic market continues with very firm prices at the end of 2024. Last week, trades were registered at BRL 76/77 in ports, and in the interior from BRL 60 in Mato Grosso to BRL 75 in Rio Grande do Sul. Exports now continue to exceed 32 mln accumulated tons, with December and January still remaining until the end of the business year. Unfortunately, those who projected losses far below 140 mln tons for soybeans this year are now talking about cuts in corn exports, once again working for one side of the market.

Sales by traders in the domestic market are a normal practice every year. Transfers from trading companies to industries, sales by ethanol industries to trading companies are normal trading practices, as this depends on good origination at harvest. If the domestic market pays better, these volumes are destined for domestic consumers; if there is no liquidity in the domestic market, the volumes are destined for exports. This has nothing to do with washout, that is, the cancellation of exports or reversal of exports to the domestic market. The prices currently paid at ports by trading companies indicate that it is better to sell at the port and not on the domestic market, that is, there is no washout. Now, a trading company selling corn to the South of the country, Northeast, or São Paulo and Minas Gerais is normal, which has to do with origination and operating margin. Such statements about washout offer signs of poor experience in the corn market or misdirection of information, which is worse.

The line-up has now reached 32.3 mln tons committed to exports, compared to 31.8 mln tons last week. Therefore, there were 500 thousand additional tons last week. Now, it is a matter of fine-tuning between the flow of shipments and the end of January to finalize this year’s number and reset the carryover stocks for 2025.

Tags: exports, soybeans, Production, yield, demand, second crop, planted area