Strong domestic demand will require more of the second corn crop in 2026

The Brazilian production planting is beginning at an excellent pace in the South region, under good weather conditions in September. As the weather improves in the Southeast, planting will also advance in these regions. As we have assessed, the domestic market in the first half of the year has a natural seasonality of higher levels compared to the second crop. However, this scenario depends heavily on the configuration of carryover stocks, the profile of the summer crop, and the weather during the fall of the second crop. In 2026, this set of indicators will naturally be present, starting with carryover stocks, in which 2025 exports are the main factor. Then comes the 2026 demand profile, initially driven by the meat sector due to the resumption of chicken exports, but mainly by the expansion, for another year, of demand from the corn ethanol sector. With Brazilian demand breaking the 100-mln-ton line in 2026, next year’s second crop will need to get good weather conditions in the fall. The focus remains on exports in 2026, in a normal production scenario in Brazil.

Planting of the Brazilian summer crop is progressing rapidly in the South region, with good grower motivation for corn. The region’s final area may even register better-than-projected growth, reaching up to 7% for the three states. We still have some uncertainty regarding the planting profile in the Southeast and Goiás, two summer planting regions. There are also good expectations for the summer in the states of Bahia and Piauí.

The projected La Niña has not yet been characterized for the global climate, let alone for South America. Therefore, the current climate remains neutral, with a bias toward a weak and short-lived La Niña should it be confirmed. Rains have begun in parts of Mato Grosso, and this should signal a favorable window for planting soybeans and second-crop corn. This week, rain is forecast for Paraná, Mato Grosso do Sul, São Paulo, and Minas Gerais, probably triggering the planting of soybeans and summer corn.

Brazilian exports maintain September’s strong numbers, with nearly 8 mln tons in the shipment schedule, with 4.2 mln tons already shipped. October still shows a weak number. There should already be a higher volume of commitments, at 1.6 mln tons. The October/January target of 20 mln additional tons, 5 mln a month, is beginning to be a concern, given that business appears to be slowing down in volume from November to January. A weak pace at the end of this business year could lead to lower exports and larger carryover stocks for 2026. Could this offset a more speculative price scenario in the first half of the year? Larger carryover stocks could contain prices in the first half of the year.

However, other indicators are relevant at this point. The first is the planting and development of the 2026 second crop. We do not see any problems for the 2026 second crop planting window so far. Therefore, the situation should focus on the fall weather, that is, from April to June, a period that determines production in the country’s Midwest region, in particular. Good weather will adjust domestic prices to a stable level in May and June, while challenging weather could generate greater speculation in the first half of the year.

Furthermore, there are demand factors. The meat sector should recover production as soon as China and Europe reopen purchases of Brazilian chicken. Regarding demand in the meat sector, there are no major concerns. Demand in the ethanol sector should once again surge in Brazil, based on existing mills, their expansions, and new ones that will start operating in 2026. At this point, the sector’s demand will increase from 22.8 mln tons in 2025 to 29.2 mln tons. Total Brazilian demand will jump to 102 mln tons, of course, depending on the progress of each sector’s indicators.

Therefore, this requires a little more from domestic production. Planting and weather conditions must progress steadily to avoid internal competition among the various consumer sectors. In a year like 2025, when demand is satisfactory for all segments, it is possible to put prices in line with export parity. In years with more difficult weather conditions, the domestic market must compete with exports, as Brazil is the world’s second-largest exporter, and there is global demand also focused on Brazilian supply. Therefore, in years of a more stable Brazilian supply, exports become more competitive with the domestic market, and prices gain momentum.

Despite the strong growth in the new ethanol demand segment, Brazil still needs to export 40 mln tons a year, given the country’s capacity to expand acreage and production. The problem is that we concentrate all this supply or production in a climate-sensitive crop, that is, a crop susceptible to rainfall cuts in the Midwest and frosts in Paraná and Mato Grosso do Sul. In any case, the expansion of domestic demand is consolidating larger planted areas, such as in Matopiba, while exports offer longer-term liquidity.

Tags: Production, La Nina, ethanol, demand, second crop, summer crop, corn, export, planting, Brazil, meat sector