Insight Focus
Brazil begins the 2025/26 grains season eyeing another record crop. Corn ethanol expansion is boosting domestic demand. However, weak exports and Argentine competition threaten the January export target of 40 million tonnes.
The global scenario of ample supply is likely to make 2026 a tough year for grain producers. For Brazil, the difference lies in the strengthening of domestic demand through corn ethanol, which is expected to continue gaining importance in the Central-West.
With the second-crop harvest scheduled to begin in June and extend through September, the country starts the 2025/26 season with expectations of another record crop. Prices are still supported by domestic fundamentals and structural transformations could reposition Brazilian corn in the global market.
Brazil Kicks Off 2025/26 Planting with Record Outlook
Summer corn planting (first crop) reached 20.8% of the estimated area by September 22, according to Conab. At the same time, the first soybean fields are being sown.
Thus, Brazil starts the 2025/26 season in a confident mood.
During its annual event Perspectives for Brazilian Agriculture 2025/26, Conab projected another record soybean crop: 177.67 million tonnes, 3.6% above the historical 2025 output of 171.47 million.
For corn, the estimate is 138.28 million tonnes, of which 80% will come from the second crop (110.48 million), 18% from the first crop (25.1 million), and around 2.7 million from the third crop, cultivated in Northeastern states and in specific areas of the North.
Source: Conab
Corn Prices Recover but Exports Lag
Even with an abundant harvest, prices did not decline as expected. After hitting a low of BRL 62.73/bag (USD 11.23) in July, the ESALQ/B3 indicator began to recover and is now trading above BRL 65.00/bag (USD 12.22). Farmers’ marketing strategies — prioritising soybean sales while holding on to corn — have helped limit further declines.
Source: Conab
Another factor supporting the Brazilian market is the structural transformation of demand in Mato Grosso, driven by the expansion of corn ethanol plants. This new front of domestic consumption, virtually non-existent just a few years ago, is helping to underpin prices.
Exports, however, remain a limiting factor. So far, only 12.1% of the current crop has been exported, compared to 15.1% last year.
Source: Conab
A recovery in Chicago or further depreciation of the real could help boost shipments. However, Argentina’s recent decision to temporarily eliminate grain export taxes adds new competitive pressure. In this scenario, Conab’s target of exporting 40 million tonnes by January 2026 looks increasingly difficult.
2024/25 Season Delivers Key Lessons
Last season was marked by wide divergences in estimates between private consultancies and official agencies. In December 2024, Conab projected 119.6 million tonnes, while the USDA estimated 127 million. Among private consultancies, forecasts ranged from 121.3 million (AgRural) to 132.7 million (AgroConsult).
With well-distributed rainfall, the 2024/25 crop ultimately delivered a positive surprise. From April onward, private consultancies revised their estimates upward month by month, reaching an average of 142.4 million tonnes by August.
The delayed onset of the rainy season slowed the pace of first-crop corn and soybean planting, resulting in a historic delay in Safrinha corn sowing in Mato Grosso, the state responsible for nearly half of second-crop output. Combined with the appreciation of the dollar against the real, this scenario triggered a sharp surge in domestic prices.
The ESALQ/B3 indicator – the official benchmark for soybean prices used in the physical market and Brazilian Exchange futures contracts — jumped from BRL 55.84/bag (USD 10.32) to BRL 90.33/bag (USD 15.92) in one year — an increase of almost 62%.
Source: Cepea
Despite the perception of climate risk, planting delays did not translate into significant yield losses. Advances in technology, particularly in seed genetics and field management, have reduced the correlation between planting calendar and productivity.
Both the 2022/23 crop and the current 2024/25 crop faced historic planting delays yet benefited from neutral ENSO conditions during the first semester and still delivered record harvests.
Source: Conab
