USDA raises corn production estimate, but market still ends the week higher
- Bullish
- Heated consumption globally;
- USDA estimates lower stocks for the 2025/26 crop at the global level;
- Strengthened exports in the United States;
- Slow Brazilian sale and strong domestic consumption.
- Bearish
- Completion of the safrinha corn harvest in Brazil;
- Record crop in the United States;
- Tariff uncertainty.
CBOT | CBOT corn prices traded higher for most of last week, while the market awaited the release of the new supply & demand estimate (WASDE) from the USDA. Even though the report showed an increase in the size of the corn crop in the United States, the market ended the week higher, with the December/25 maturity closing Friday at US¢430.00/bu (+2.9%).
Market expectations were for a decline in production, driven by a negative revision to productivity. The lower productivity, as expected, occurred, but it was more than offset by an upward revision of the acreage of corn in the country, which was enough to reinforce the record production outlook, with an expected harvest of 427.1 mmt of corn in the country this year.
Furthermore, a positive revision was also observed for exports 2025/26, now estimated at 75.6 million tonnes. Although still in its early stages, the U.S. corn exports program is already quite strong, justifying this revision.
Overall, the result pointed to a slight contraction in ending stocks, despite the increase in production, which explains part of the upward movement that occurred during last Friday's trading session.
Another factor that may help explain this movement is short covering by the funds. According to StoneX estimates, Friday’s session likely saw a reduction of approximately 17,000 contracts in the net short position held by speculators. This shift appears to be linked to expectations that upcoming Supply & Demand reports will not indicate higher production than what was reported last week. This is particularly due to the emergence of crop diseases and unfavorable weather conditions across several regions of the country in August, which could lead to downward revisions in productivity forecasts.
Intraday (15 min) Dec/25 contract - CBOT
Source: CBOT. Design: StoneX.
USDBRL | The international market will follow the interest rate decision by the FOMC, in the US, this Wednesday (09/17). The expectation is for a 0.25 p.p. cut in the interest rate of the world’s largest economy, although bolder estimates point to a 0.5 p.p. cut, which is likely to be more difficult to achieve given the cautious stance that has prevailed in the Federal Reserve in recent years.
The widening of the interest rate differential between the United States and Brazil – where the interest rate is expected to remain at 15% after the Copom meeting, which will also conclude on Wednesday afternoon – points to a strengthening of the trend of appreciation of the Brazilian real, which has been ongoing since the beginning of the year.
The interest rate cut in the US economy will be much more closely related to the weakening of the country's labor market than to a weakening of inflation, which remains above target, even with little impact from tariffs on price indices.
The foreign exchange market will also be attentive to possible retaliation by the American government to the conviction of former President Jair Bolsonaro last week. U.S. Secretary of State Marco Rubio called this action a "witch hunt" and stated that the U.S. "will respond appropriately." Even so, last week there was a retreat by the US regarding the tariffs aimed at Brazil, as the additional tariffs on Brazilian pulp were withdrawn, which was very well received by the market.
Intraday (15 min) Sep/25 contract - B3
Source: B3. Design: StoneX.
Brazil | Business activity remains slow in the Brazilian market, with delayed sale continuing to provide support for domestic prices. In addition, the continued strengthening of the real against the dollar, as mentioned above, has further distanced the producer from the market for now.
At B3, the November/25 maturity closed the week trading at R$68.20/bag, showing practically stable movement during the week, reflecting the recent low dynamism of the domestic market.
The sowing of the 2025/26 summer crop continues to progress mainly in the southern region of the country, with about 4.51% of the acreage as of last Friday, with sowing still behind compared to previous crops.
Argentina | The Argentine peso has maintained a strong downward trajectory in the last few weeks with the political crisis faced by Javier Milei's government. Last week, this movement gained even more strength as the elections in the province of Buenos Aires delivered victory to the largest opposition party to the current national government, indicating a tougher scenario for the current government in the face of the upcoming Argentine legislative elections, which will take place in just over a month.
This depreciation of the Argentine peso, combined with the completion of the corn crop harvest in the country—estimated at 49 million tonnes—has made Argentine corn highly competitive in the global market, with FOB prices being traded just above US$200/mt, a value close to other sharply competitive origins, such as the United States.
Futures contracts traded on CBOT (US¢/bu)
Source: CME. Design: StoneX.
Futures contracts traded on B3 (BRL/bag)
Source: B3. Design: StoneX.
Spot prices in Brazil (USD/60kg bag)
Source: StoneX.
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