Brazilian corn domestic market looks back to 2024, ignoring exchange rate differentials

The 2025 Brazilian second corn crop is completing its regional harvests, and the planting of the 2026 summer crop is beginning in Rio Grande do Sul. This is a period of crop transition, in which spring weather will be crucial in the South of the country to focus on the transition and the first half of 2026. Exports will also be crucial to determining the profile of carryover stocks that will help supply in the next half of the year. However, growers and some sources without major experience in the corn market are adjusting to the past; that is, in the second half of 2024, prices rose sharply. The awful prices of the second crop gave way to highs until March, which, regionally, almost doubled the commodity prices. However, this scenario is presented to growers, perhaps to encourage summer planting, without explaining the reasons. In 2024, the dollar jumped from BRL 4.70 to 6.30 at the end of the year, raising port prices and forcing the domestic market to race for availability. The question to consider is: Will growers see this exchange rate opportunity again in 2025 as a catalyst for price highs?

While the harvest of the corn second crop is closing, being sold and stored, the Brazilian domestic market is creating hypotheses for future prices. In an age of artificial intelligence, ready-made charts, and analyses conducted without signatures, a bullish outlook for corn at the end of the year emerges. Many of these arguments lead growers to withdrawal, bullish focus, and encouragement to summer planting. Summer planting always deserves attention and consideration of a good area, as this is where the best opportunities for the domestic corn market lie. However, most of this information leads growers to expect short-term highs, and this year, looking to the past rather than to the future.

In this environment, some analysts believe that corn prices in 2024 started at BRL 40/45 during the second-crop harvest in Goiás and/or BRL 35 in Mato Grosso, and by December were already at BRL 65 and BRL 55/60 a bag, respectively. The popular claim is ethanol demand, etc. However, the underlying reasons for the movement are unclear. Some key differences can be mentioned:

– The CBOT reached a low of USD 3.85 during the US harvest, quickly recovering and surpassing USD 4.00/bushel. The 2024 crop was 377 mln tons, almost 50 mln tons below the 2025 crop, which will begin to be reaped. Therefore, international supply conditions are quite different, with Argentina and Ukraine still having good crops;

– Brazil’s 2024 corn second crop hit 125 mln tons, 14 mln tons below the 2025 second crop. Therefore, even with the growth in domestic demand, there is more supply in the domestic market in the second half of the year compared to 2025;

– In 2024, port prices started on average at BRL 60/bag during the second-crop harvest season and reached the average of BRL 78 by the end of the year. Consequently, a rise in port prices triggers a rush to exports and a defensive domestic market for physical corn;

– The dollar jumped from BRL 4.70 to BRL 6.30 at the end of the year, providing plenty of room for higher port prices and a domestic price correction.

Observing this combination of factors, we note that international supply showed a completely different positioning than it currently does. The Brazilian second crop was much smaller than the current one, and the exchange rate was the major driver of changes in domestic price levels in the second half of the year in the post-harvest period. In 2025, we face a very different situation: a record US corn crop, a record Brazil’s second crop, and a completely different exchange rate. Of course, given the Brazilian political and geopolitical situation, a currency rally is not ruled out by the end of the year. However, if there is any variable that can drive corn prices through December, it is the exchange rate. Given the current interest rate situation, it seems unlikely we will see the same performance as in 2024, with effects on port prices and domestic corn prices.

For this reason, there is always the possibility that new developments will change prices in the short term. However, we emphasize that for prices to show a similar performance to 2024, we absolutely need changes in the exchange rate profile. This change will be aligned with the trajectory of the interest rate curve.

At the same time, for the market to avoid dependence on the exchange rate, it needs to confirm a strong export pace, as we have pointed out. During record-breaking US crops, this export variable always weighs on price formation and Brazil’s sales flow. Brazilian exports, to date, have reached almost half of the year’s target. So far, 20 mln tons have been effectively committed, with 22 mln remaining for shipments between October and January. This will require a little over 5 mln tons a month from Brazil during this period. We believe that, as long as prices do not find room to rise domestically, sales will increase again, and exports for the period will reach their targets, also considering that warehouses will need to be cleared for the 2026 crop.

With port prices currently at BRL 65/66/67 for shipments from September to December, and with exceptional business above this level, Brazil will ultimately increase exports, but at low prices. For these port levels to rise, we will need highs on the CBOT or in the exchange rate, as premiums are already excessively high.

Tags: crop, corn, export, Brazil, prices