Camila Fontana: Hello everyone, Argus Media offers podcasts about developments in the commodity and energy markets around the world. I am Camila Fontana, Deputy Bureau Chief at Argus based in São Paulo, and I am here with Nathalia Gianetti, Agriculture Specialist and one of the contributors to the Argus AgriMarkets and Argus Brazil Grains and Fertilizers reports. So today we will talk about the results of the 2024-2025 corn crop and expectations for the market for the fourth quarter of 2025.
So, Nathalia, what about output in 2024-2025?
Nathalia Giannetti: Well, Camila, this season produced a record of over 139 million tonnes, including the first, the second and the third crop. This record was driven by a national record 112 million tonnes from the second corn crop. But these are official government figures released by the national supply company Conab.
Market participants estimate that the second crop may have totalled over 115 million tonnes. This volume surpasses the previous record of approximately 102 million tonnes from the 2022-23 season.
Now, going back a little bit, Brazil has three corn crops, as I said before, with the second being the most significant of them. It is also known as winter corn crop or “safrinha”, which means little crop. The nickname comes from the early days when it was planted in a small portion of areas. Winter corn is one of the alternatives for crop rotations after soybeans are harvested.
Soybeans continue to be Brazil's main crop, but over time, corn became more profitable for producers and gained market share.
CF: What were the main factors behind the records that you just described?
NG: Well, this year's record corn production was driven not only by excellent weather conditions that boosted yields in key producing states, but also by expansions of planted area thanks to a higher expected demand, especially from domestic sectors like corn ethanol and animal feed. It is worth noting that initial projections for the 2024-25 season were far from record breaking.
Much of the area expansions this season happened after favourable weather conditions boosted yields, which prompted producers to start investing more in planting winter corn.
CF: And how was the weather in Mato Grosso, which is Brazil's top corn producing state?
NG: In Mato Grosso, which accounts for nearly 40pc of the national output according to Canab, rainfall remained regular and well distributed until June this year. Usually, the Brazilian autumn brings lower precipitation volumes until a dry winter finally begins in the middle of the year.
But that didn't happen this year, and this allowed many crops to develop under ideal conditions, even those planted after the planting window. The ideal planting window in Mato Grosso ends on February 28. After that, crops risk facing losses because of the dry weather that hit them during their reproductive stages.
These phases are highly sensitive to water stress. Crops that are planted after this deadline are also not covered by crop insurance. This year, about 15pc of corn areas in Mato Grosso were planted after the ideal window, which is a pretty significant share.
But because of the more regular rainfall during the autumn, even crops reaching those more sensitive stages in July, when conditions were very dry, ended up benefiting from high soil moisture levels. Official data from the Mato Grosso government shows that the state produced over 55 million tonnes in the 2024-2025 crop. That surpassed the previous record by about 3 million tonnes.
CF: How was the weather in Paraná, which is the second largest producer of corn in Brazil?
NG: In Paraná, rainfall was also very frequent and well distributed until June. But the weather wasn't as perfect overall. The more regular rainfall compensated for droughts earlier this year and a frost that hit the state in late June.
But despite these challenges, Paraná entered the season with a record production of over 70 million tonnes, according to official estimates. That is also 3 million tonnes above the previous record posted two years ago.
CF: So, we can assume that the area planted with winter corn has expanded compared to the previous crop?
NG: Exactly. This season, the winter corn areas expanded by 6pc, according to Conab. The 2024-2025 season crop was planted across a record 17 million hectares, and that more than offsets last season's losses. In 2024, low prices discouraged planting and led to acreage cuts.
But this scenario was reversed in the 2024-2025 season because of expectations that the global corn demand would surpass the available supply. In Brazil, a record domestic demand was expected because of the animal feed and corn ethanol sectors. Domestic demand was already record-breaking last year.
In the last quarter of 2024, strong demand from these sectors kept prices progressively higher until April this year. And during this time, the export market lost competitiveness and started declining its market share.
CF: So domestic demand has been increasingly important for producers, is that right?
NG: Yeah, that is right. Brazil's domestic demand is expected to continue growing its share in the national market. Conab forecasts the domestic demand for the 2024-2025 crop will reach about 90.5 million tonnes, which is over 6 million tonnes above the demand from last season. Corn ethanol production alone accounts for 4 million tonnes of this increase.
The National Corn Ethanol Union estimates that ethanol units will crush over 18 million tonnes of corn this season. And Brazil has already 24 operational corn ethanol plants, based on data from the national oil regulator ANP. And there are 19 other units authorized for construction already, and another 19 that are either being planned or scheduled for construction, according to the ethanol union.
So, this sector has grown steadily over the past two years and is gaining more space in Brazil's corn market. It is also worth noting that most corn ethanol plants are in the central western region, which is also Brazil's main corn-producing hub.
CF: And the animal feed industry is the biggest player.
NG: Yes, most of the volumes that stay in Brazil go to the animal feed industry. This year, the animal feed union estimates that 60 million tonnes of corn will go to feed production. This estimate includes DDGs, which are distiller's dried grains, a byproduct of corn ethanol.
So, purchases from both sectors accelerated in the last half of 2024 and remained at a strong pace in early 2025, which is a typically slower period for sales. That lifted prices to their highest level since March 2022, when an oversupply started triggering a heavy decline of prices. But since April, domestic purchases have slowed and that pressured prices alongside a record expected production for Brazilian crop.
In the second half of the year, buying is slightly accelerated once again, but purchases remain well below levels from a year ago and from earlier this year, which is also way below farmers' expectations. That is because buyers are reportedly well supplied for the moment and they adopt a more cautious approach to purchases, which avoids another price surge like the one we have seen before.
CF: So, that means corn exports are playing like a secondary role?
NG: Exactly. Brazilian corn exports are repeating last year's pattern and play a more secondary role right now. Importers expected that a record Brazilian and U.S. crops would pressure prices down, but sellers kept offers high because first they already buy stocks at a higher price and expected a strong domestic demand to support prices.
This deadlock between sellers and buyers has hindered exports with volumes far below ideal for a record season. The National Association of Exporters reports that shipments from January to September this year didn't reach 25 million tonnes. Shipments are slightly above the total exported a year ago, but that was when production was a lot smaller.
In 2023, when Brazil produced the previous record of 102 million tonnes, exports had reached 34 million tonnes at this time. So, this year we have a 10 million tonnes surplus of production, but exports are also 10 million tonnes below the total shipped two years ago.
The export market is also facing a supply shortage. Farmers are selling very little at this point because they hope that prices will rise once again because of a record domestic demand. And the little they sell goes to the domestic buyers who pay a lot more than importers do. This lack of competitiveness on both supply and demand sides in the export market led market participants to question whether exports will actually reach the projected 40 million tonnes for the season.
CF: Can we talk about any sort of trend or outlook?
NG: Yeah, we can. It is a little hard to predict the long-term future of Brazil's core market. As seen in recent months, decisions such as the U.S. tariffs or Argentina's suspension of export taxes can shift market dynamics quickly.
But the trend is for the domestic market to continue growing and expand its influence over price movement as it already has over the past two years. Brazil's production is also being adjusted according to the domestic demand, especially in the center west. Expectations of rising demand from the corn ethanol industry are already encouraging farmers to invest more in winter corn, especially in states such as Mato Grosso.
CF: Thank you, Natalia. Thank you to our listeners. Stay tuned for more episodes of Market Talks.
We will see you next time.
