Porto Alegre, August 13th, 2025 – Owing to strong export demand for the old crop of corn, the supply and demand framework for the new crop, 25/26, did not suggest a significant stockpile movement. However, the USDA’s field assessment, to be released this August, suggests higher yields and a correction in these final stocks of the new crop. The market expectation of a yield of 183.5 bushels/acre puts production at record-breaking 404.5 mln tons, and stocks could rise again to 48 mln tons. Therefore, the market nearly tested the local reference price of USD 3.70/bushel last week, reflecting an oversupply for the harvest that begins in thirty days. For the international market, the United States continues to have the cheapest corn, and Brazilian corn, at current premiums, becomes quite expensive.
The outcome of the trade agreements seems to suggest that virtually all US trading partners will have to exempt their imports while having their products imported into the United States taxed by at least 10%, with a few exceptions. This was the case with some agreements with countries in South Asia and Oceania. In other cases, such as Japan, there was a 15% reciprocity between trading partners. This means that, for some importers, products of US origin will be 10-15% more expensive. A shift of demand, or part of it, to South America, which does not have bilateral taxation, could generate exceptional demand for some segments.
Note that Brazilian and Argentine corn, compared to US corn, will eventually have a tariff differential in their favor and, perhaps, induce additional export demand. Therefore, corn and soybean premiums in Brazil and Argentina have soared in an attempt to absorb part of this tariff differential. Only actual trade movements will reveal this definitive picture in terms of volumes and the clear effects of the change in global trade patterns.
Meanwhile, the US crop remains in full conditions but again with a strong heat wave this week associated with good rainfall. Corn, in grain-filling stage and with optimal soil moisture, should not be affected by the heat wave. The harvest is expected to begin in mid-September. This week, USDA will update its supply and demand estimate in a routine report. However, this August report traditionally updates projected yields based on effective field data.
The market has very high yield estimates, given this year’s perfect weather. Average expectations are 183.5 bushels/acre, above the record 181 bushels/acre expected by the department’s analyst. This update could put production at 404.5 mln tons, a new record, and 5 mln tons above the previous estimate. If there is no change in demand projections for the old and new crops, ending stocks could rise from 42 to 47 mln tons.
This is not super stockpiles, given the higher demand projections, particularly for exports between 2025 and 2026. There is also the possibility that the Department of Energy will authorize a new ethanol mandate, increasing production and resulting in a proportional increase in corn demand. The first factor, therefore, could lead prices to test USD 3.70/bushel, as almost occurred last week, followed by demand factors that could attempt to restore prices above USD 4.00/bushel later on. In any case, we can say that corn is reaching its price bottom, even if higher production is confirmed this year.
Argentina is now exporting more slowly, with export registrations currently at 22 mln tons. Shipments are approaching 18.2 mln tons, and sales will need to reach at least 34 mln tons this business year.
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