Corn appreciates during the week, but doubts regarding the U.S. balance still prevail
- Bullish
- Global consumption remains strong;
- USDA estimates lower global stocks for the 2025/26 crop;
- Strengthened U.S. exports;
- Strong domestic consumption in Brazil.
- Bearish
- Expansion of planted area for 2025/26 in Brazil;
- Record harvest in the United States;
- Higher stocks in the United States.
CBOT
The corn market in Chicago showed signs of recovery last week, with December/25 appreciating 2.3% to close the week at US¢413/bu; the US¢425 level was an important resistance point that may be tested again if fundamentals support it. A wetter regime seems to be causing some problems for corn harvesting in certain U.S. regions, which could inspire less selling momentum from speculative funds.
The U.S. market continues to closely monitor prospects for the corn balance in the country. Over recent weeks, the view has strengthened that the USDA's September figure for U.S. production (427 million tonnes) is inflated. Even so, the market perceives that the domestic consumption figure is equally overestimated. Thus, reports that corn productivity in the U.S. might be lower have struggled to inspire significant gains in prices.
U.S. exports have been the big topic in recent months. Last week, export inspections came below analysts' expectations. Still, the numbers remained strong. Moving forward, concerns that the Mississippi River's draft level will drop significantly in the coming weeks partially threaten the competitiveness of American corn, remaining a relevant point of attention.
Intraday (15 min) December/25 Contract - CBOT
Source: CBOT. Prepared by: StoneX.
Brazil
Prices on B3 also showed weekly growth, although they operated lower earlier in the week. The November/25 contract ended Friday trading at R$68.47/bag (+0.9% for the week).
The market continues to monitor summer crop planting, progressing well in the southern region but slower in the southeastern region.
Brazilian exports recorded good volumes in early October and are expected to total 6.46 million tonnes by the end of the month, according to ANEC. This volume, if realized, will exceed the 5.67 million tonnes shipped in October last year. Nevertheless, the Brazilian export market is not particularly competitive globally at the moment. However, the country may benefit from dynamics in the global corn market, such as delays in Ukrainian harvesting. This topic will be explored in detail in the special session at the end of this report.
The Brazilian government agency Conab has released its initial estimates for the 2025/26 crop, highlighting a 3.8% increase in planted area for the second corn crop, which, combined with an increase in the summer corn area, should result in a harvest of 138.6 million tonnes. The annual reduction comes from expectations of lower productivity levels. Nonetheless, indications are that Brazil will have a robust corn crop next year. It's worth noting that StoneX will publish its first estimates for the upcoming second corn crop on November 3.
Another highlight in Conab's estimates is the 10% increase in the nationally planted area of sorghum. Sorghum demand is expected to be strong next year, with expectations of a strengthened export market for this grain. Additionally, the fact that sorghum can substitute corn as a raw material in some ethanol plants could also boost sorghum demand in the coming years.
Regarding ethanol plants, the market was surprised last week with the announcement that Inpasa and Amaggi terminated an agreement made weeks ago to build at least three corn ethanol plants in Mato Grosso. Amaggi plans to proceed with the project independently, understanding that speed will be crucial to ensure investment returns before the sector's consolidation. Although surprising, this news is unlikely to significantly impact long-term prospects for corn ethanol production.
Intraday (15 min) November/25 Contract - B3
Source: B3. Prepared by: StoneX.
FX
The dollar closed last week lower, helping to moderate corn gains on B3. Despite a global increase in risk aversion for various reasons, expectations that authorities in Washington and Brasília are progressing in resolving trade disputes continue to keep the Brazilian real stronger.
The U.S. government shutdown and subsequent suspension of economic data releases remain a bearish factor for the exchange rate. However, the release of the Consumer Price Index on Friday (24) will be a key factor in determining foreign exchange market trends and supporting the next interest rate decision in the U.S., scheduled for next week.
In Brazil, the IPCA-15, a preview of monthly inflation, will also be published on Friday. The expectation is that the indicator will point to moderation in inflation. Although interest rate cuts are not yet on the horizon in Brazil, weaker inflation could signal that such cuts may come soon, potentially weakening the real against the dollar.
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Special | Ukraine
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Corn harvesting in Ukraine is experiencing significant delays this year, as shown in the graph below, kindly provided by the Black Sea team at StoneX.
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Ukraine Corn Harvest (%)
Source: StoneX.-
A wetter climate is the main reason for this delay, alongside negative revisions in local estimates that point to a harvest likely under 30 million tons. Lower and delayed production will limit the country's ability to supply China, one of the primary destinations for Ukrainian corn, in the coming months. Practical results of this may include increased interest from China in Brazilian corn during this last quarter. In September, Brazilian corn exports to China were the highest since January 2024, possibly indicating this new demand.
Nonetheless, Chinese international demand today is relatively low, with official bodies estimating imports between 6 and 7 million tonnes for the 2025/26 crop year. Thus, Brazilian corn imports to China are unlikely to exceed 2 million tonnes in this last semester.
Futures Contracts Traded on CBOT (US¢/bu)
Source: CME. Prepared by: StoneX.
Futures Contracts Traded on B3 (R$/bag)
Source: B3. Prepared by: StoneX.
Spot Prices in Brazil (USD/60kg bag)
Source: StoneX.
INDICATORS
