Brazil corn market: Tight balance keeps prices supported despite large crop

By Geraldo José Guimarães Isoldi, South America Correspondent

As a new year begins, market attention in Brazil is increasingly shifting toward the planting of the second corn crop (safrinha). Estimates released on Jan. 15 by CONAB (Brazil’s National Supply Company, a federal agency responsible for official crop estimates and supply-and-demand balances) kept safrinha production unchanged at 110.46 million metric tons. Combined with a minor downward revision in the summer crop (first crop), from 25.91 to 25.90 million tons, and an estimated 2.51 million tons from the third crop, total Brazilian corn production in the January update reached 138.87 million tons.

This figure is virtually unchanged from December’s projection (138.88 million tons) and still represents the second-largest corn crop in Brazil’s history.

For soybeans, as harvest has just begun, CONAB revised its estimate downward by 1 million tons, from 177.12 million tons in December to 176.12 million tons in the first estimate of the year. This volume came in below the USDA’s January WASDE projection, which estimated Brazilian soybean production at 178 million tons.

As in previous seasons, corn production estimates between CONAB and USDA remain widely divergent. In 2025, the USDA projected 136 million tons, compared with CONAB’s 141 million tons. For the 2025-26 season, USDA currently estimates Brazil’s corn crop at 131 million tons, nearly 8 million tons below the Brazilian agency’s projection.

While total supply figures were largely unchanged in CONAB’s January report, an upward revision in 2024-25 corn exports, from 40.0 to 41.5 million tons, reduced projected ending stocks for the 2025-26 season from 13.54 to 12.0 million tons. Despite this reduction, stocks remain the largest since the 2020-21 season, suggesting a relatively comfortable situation at first glance.

However, Brazil’s corn balance has been structurally tightening. Rapid growth in corn-based ethanol production, combined with rising global demand for Brazilian animal protein, has significantly increased domestic consumption. As a result, total demand has expanded from 91.99 million tons in 2021-22 (71.17 million tons for domestic use and 20.82 million tons for exports) to an estimated 141.1 million tons in the current season, including 94.6 million tons for domestic consumption and 46.5 million tons for exports.

This demand level exceeds current production estimates by 2.23 million tons, pushing the stocks-to-use ratio down to 13%, well below the 19% recorded in the 2020-21 season.

Private analysts continue to show a wide range of projections. Brazilian soybean estimates range from 171 million tons (AgResource Brasil and Céleres) to 180 million tons (AgRural), for an average of 175.7 million tons across the consultancies monitored by Terra Investimentos. For corn, estimates range from 134 million tons (StoneX) to 146.5 million tons (Céleres), with an average projection of 139.38 million tons.

As soybean harvest advances, production estimates are expected to become more accurate. Corn, however, remains more uncertain. The safrinha accounts for roughly 80% of Brazil’s total corn output and is still in its early planting stages, leaving room for significant revisions. That said, current weather conditions and outlooks suggest that the more optimistic projections could materialize. According to World Weather, climate conditions across Brazil remain broadly favorable, supporting early development of the second crop.

Despite ample global corn supplies, Brazilian corn prices remain firm, largely due to strong domestic demand growth, which continues to reshape the country’s internal market dynamics. Even in a year marked by a record harvest, corn prices in Brazil rose 7.65%, moving from USD 11.76 per 60-kg bag (USD 4.98/bu) to USD 12.66 per bag (USD 5.36/bu).

This shift has gradually redirected market focus from exports back toward domestic demand. In this context, CONAB’s export projection of 46 million tons for the new season appears ambitious. While the total demand of 141 million tons seems reasonable, the export share may be overstated. A more conservative scenario would place exports closer to 40 million tons, with domestic consumption exceeding 100 million tons.

Overall, Brazil’s corn supply and demand balance is now extremely tight, leaving prices highly sensitive to bullish seasonal factors typically associated with the safrinha. Beyond its dominant share of total production, the second crop also carries the highest climatic risk.

Under these conditions, Brazilian producers are likely to see corn prices supported at least near current levels, around USD 12.68 per 60-kg bag (USD 5.37 per bushel). The main downside risk remains geopolitics. Historically marked by political instability, Iran has ranked among the three largest buyers of Brazilian corn since 2001 and, in 2025, imported a record 9.08 million tons — the second-largest volume ever purchased by a single country, trailing only China in 2023, which imported 16.12 million tons.

That said, even in the event of a disruption in shipments to Iran, any immediate downside pressure on Brazilian corn prices would likely be short-lived. Given Brazil’s tight domestic balance, structurally rising internal demand, and increased flexibility to redirect volumes to alternative destinations or the domestic market, the longer-term impact of such a disruption may prove more limited than initially expected. In this sense, geopolitics may introduce short-term volatility, but fundamentals continue to argue for price resilience in the Brazilian corn market.

My name is Geraldo José Guimarães Isoldi, and it is a great pleasure for me to contribute monthly with analyses of the agricultural market in Brazil and South America. Feel free to reach out with questions, suggestions, or even for a friendly chat. Email geraldoisoldi@terrainvestimentos.com.bror on LinkedIn: www.linkedin.com/in/geraldo-isoldi-5072374b