Porto Alegre, May 29, 2026 – Mathematics is working against domestic corn prices at the moment, to the panic of producers already suffering from low soybean prices. However, the market is a measuring stick aligned by the many variables that form prices, not by a desire to raise prices or create environments conducive to higher prices. At this moment, there is a visible desire to push domestic prices above export parity. Could the domestic market trade above export levels? It is always possible if certain factors occur. Today, as we have already pointed out, crop losses in Goiás and Minas Gerais are not sufficient to eliminate exports from the 2026 balance sheet. Therefore, if the market wants higher prices, it will first need to export before attempting a recovery in the national average. The other possibility would be an international price rally, for any reason, or a sharp currency depreciation domestically. The fact is that the volume of production set to enter the Brazilian market over the next ninety days does not help consolidate ambitions for higher domestic prices during the harvest period.
The Brazilian weather story is beginning to lose space in domestic speculative thinking. Frosts in Paraná, Paraguay, and Mato Grosso do Sul from this point forward are no longer likely to cause damage severe enough to create a bullish impact on domestic prices. Rainfall is still needed in several areas of Goiás and Minas Gerais, especially for sorghum. But most crops have already defined their production potential. Tocantins still needs rainfall. São Paulo and Mato Grosso are now heading toward harvest. Mato Grosso should begin harvesting in early June, though the bulk of the crop will come in July and August. Paraná, southern Mato Grosso do Sul, and Paraguay should begin harvesting in mid-June.
Therefore, we must recognize that there is still weather to monitor, but with only limited effects on driving domestic prices abnormally higher. Over the next ninety days, Brazil will be harvesting 99 million tons of corn and 5 million tons of sorghum, even with some future revisions. Paraguay will harvest 6 million tons, with nearly 2 million tons expected to flow into Brazil.
This is a significant supply volume, requiring something different to influence prices upward during harvest. The Brazilian domestic market is trying to impose a media narrative lacking accurate data, claiming higher prices based on drought in Goiás and Minas Gerais. As we have already assessed, the volume of losses in these two states is not enough to neutralize the harvest effect on prices, perhaps only preventing stronger selling pressure and deeper declines. Some sources disconnected from actual production realities in the interior are also claiming that the market must rise because there were losses. Every safrinha season there are regional crop losses somewhere. In 2025, Minas Gerais experienced the same poor weather and losses, yet prices were unable to rise.
Why do prices fail to rise even with regional losses? Because the safrinha produces twice the domestic consumption requirement for the second half of the year, meaning we need to remove a considerable volume through exports. At this point, export demand is what dictates domestic prices during the safrinha period. Some argue that the strong growth in ethanol demand would provide domestic balance. Certainly, this contributes, as do other demand sectors, especially meat production. However, growth in corn demand for ethanol is still not sufficient to eliminate exports as the primary price-setting factor in Brazil.
Thus, export prices continue to guide domestic commercialization. Well, what could happen if the domestic market retains a large portion of the safrinha in storage and does not sell? Weak exports would lead to larger carryover stocks for 2027, volumes incapable of being absorbed by all segments of domestic demand.
As a result, commercialization of the 2026 safrinha began accelerating more strongly last week, with producers in Mato Grosso and Mato Grosso do Sul reducing weather concerns and focusing on harvest and sales. Meanwhile, regional ethanol plants began increasing purchases more aggressively, partly because they are building stocks through the 2027 safrinha. Nothing abnormal or outside the standard pattern. The only unusual point — which is expected to end in January with tax reform — is the use of tax credits in forming domestic prices. Negotiations are limited to cooperative positions together with certain consumption sectors and now also exports. Thus, the normal market operating at an average of R$ 40/42 in Mato Grosso sees deals reaching R$ 50 due to tax mechanisms. Most producers are unable to capture this benefit, with access limited to cooperative members or segments capable of generating tax credits.
We are now in the traditionally somewhat complicated phase between the end of summer crop supply and the beginning of the safrinha. Some consumer inventories are beginning to tighten, some buyers want to be covered before the first harvests arrive, and producers are seeking better prices. As a result, commercialization continues at prices that can be considered balanced in most parts of the country. São Paulo, for example, is currently trading at levels aligned with port prices, around R$ 65/66 CIF consumer, and is receiving many offers from outside the state for July onward delivery. For trading companies, it is more attractive to sell into São Paulo than to ports. With rainfall in São Paulo, the safrinha crop is progressing well despite some losses in the northern part of the state. Still, it will be very difficult to see local prices significantly above port levels during the safrinha harvest.
In the Matopiba region, the market is already adjusting to this reality. Tocantins at R$ 50, Maranhão at R$ 52/54, and Bahia at R$ 51/53 are levels beginning to adapt to the need for commercialization liquidity, even with new ethanol plants in the region. Brazil’s credit environment is not favorable for strong producer withholding, and the need for liquidity on large lots will push prices toward export parity, at least during harvest. If exports perform well, prices may have a chance to recover after October; otherwise, excessive domestic supply will affect prices at year-end.
Therefore, the domestic market needs a more depreciated exchange rate and some recovery in CBOT prices for port prices to improve and for interior prices to become more aligned with production costs. The positive news of the week is that urea prices fell on the international market to US$ 605/ton, which should help ease costs for the new crop in South America.
