Brazil’s 140-Million-Ton Corn Harvest: Necessary, but not dufficient to cool prices

Brazil has just wrapped up its 2024/25 corn season with a record crop estimated by CONAB at 141 million metric tons. Even though exports have been only “reasonable”, 33 million tons shipped through the first week of November and 40 million tons projected by January 2026, domestic market dynamics have been strong enough to push prices steadily higher over the past several months.

Farmers’ strategy of holding grain in expectation of more attractive prices has worked. The ESALQ B3 physical index, a cash market benchmark for the Campinas region in São Paulo state, rose USD 0.83 per 60-kg bag (+6.88%) from October to November, climbing from USD 12.07 to USD 12.90. Through December 4, it added another USD 0.28 (+2.17%), reaching USD 13.18, its highest level since late May.

Futures on Brazil’s B3 exchange, however, moved in an exaggerated fashion. Driven by what appeared to be excessive concern over early-season weather and soybean crop development, traders pushed the January contract to a peak of USD 14.34 per bag. At that moment, the spread between the contract and its settlement index reached USD 1,30, with only about 30 trading sessions remaining until expiration, a divergence difficult to justify based on fundamentals.

By the second week of December, futures began correcting back toward the physical market. On December 11, January futures traded near USD 13.34, while the previous day’s ESALQ B3 index was calculated at USD 12.74, narrowing the difference to USD 0.60.

Despite the market noise, Brazil’s new grain season continues to progress well. In its December update, CONAB trimmed soybean production only marginally, from 177.6 to 177.12 million tons, due to a small reduction in planted area (from 49.06 to 48.84 million hectares — 121.1 to 120.7 million acres). Projected yield remains at 3,620 kg/ha (approximately 1,465 kg/acre), and crop conditions have generally been favorable despite isolated pockets requiring replanting.

Corn adjustments were equally minor. Total production edged up from 138.84 to 138.88 million tons. The breakdown remains:

• Summer crop (1st crop): 25.91 million tons (18.65%)
• “Safrinha” (2nd crop): 110.46 million tons (79.54%)
• 3rd crop: 2.51 million tons (1.81%)

CONAB also maintained export projections at 46.5 million tons for the season and domestic consumption at a record 94.6 million tons. With an expected beginning stock of 14.06 million tons in February 2026 and projected imports of 1.7 million tons, Brazil is likely to end January 2027 with 13.54 million tons in ending stocks.

For the 2024/25 marketing year, which runs through January, CONAB kept its export projection at 40 million tons. Although some analysts question this number, I consider it entirely feasible. Through the first week of November, Brazil had already shipped 33 million tons, leaving only 7 million to be exported in December and January.

From February to November, the major buyers of Brazilian corn were:

• Iran: 6.35 million tons (20.3%)
• Egypt: 5.68 million tons (18.2%)
• Vietnam: 3.02 million tons (9.7%)
• China: 1.71 million tons (5.5%)
• Saudi Arabia: 1.64 million tons (5.3%)

Overall, soybean crop progress remains solid, and Brazil is on track for another record harvest near 177 million tons, in line with both CONAB’s estimate and private trade surveys.

As for corn, the larger portion of the crop, the safrinha crop, will begin planting in late January and February. A national crop near 140 million tons is a reasonable expectation. But, as we saw this year, such a volume does not necessarily imply lower prices. Rapidly rising domestic consumption has reshaped Brazil’s supply-and-demand balance, reducing the bearish impact of large harvests.

Aside from a temporary pressure point in January, when early supplies may weigh on the market, prices are expected to remain firm. Brazil not only is capable of producing a 140-million-ton corn crop, at this point it essentially needs one. This structural shift suggests that price volatility may increase meaningfully in 2026 as domestic demand assumes an even larger role in price formation.

Author: Geraldo José Guimarães Isoldi

Tags: corn, Brazil, prices, crop, exports