Porto Alegre, July 29th, 2025 – Brazilian producers have some concerns inherent to the current international developments. Some involve the possibility of the US-China deal impacting the premium environment in Brazilian domestic prices. Others involve the corresponding sanctions against Brazilian authorities and the deterioration of the domestic political and economic framework regarding the exchange rate. Finally, there is uncertainty about whether sufficient funds at controlled interest rates will reach banks in time for planting the 2025 crop. As a result, sales appear sluggish, the corn second crop is being held back, and decisions are being postponed in wait for some future price improvement, despite the ongoing harvest of the largest second crop in history. The loss of expectations toward soybeans could lead to higher domestic sales of this commodity and further delay corn sales.
On the eve of the start of the planting of the 2025/26 summer crop and still advancing into the harvest of the great 2025 second crop, producers need to make decisions. With very high interest rates, uncertain bank resources, and trade uncertainties ahead, producers are currently selling soybeans and corn at a very slow pace. There are uncertainties regarding the exchange rate that could change the domestic trade environment and provide a signal for port prices.
These decisions are easing the pressures of the second-crop corn harvest. Warehouses are beginning to fill up, with producers having no control over prices. Storage in silo bags is becoming increasingly common, as in Mato Grosso. Prices are beginning to firm up somewhat in markets where harvests are being finished. Producers have already adjusted their crop within their logistics, and domestic demand remains strong enough to absorb as much supply as possible during this period of low prices. Producers now believe in future signals that could improve selling prices.
At this point, we return to the focus on exports. The steeper retention should be considered normal, at a time when prices are very low for producers, who are trying to wait for some new factor to emerge. This week, for example, producers are trying to ask for BRL 50 in Mato Grosso. This scenario, compared to the port level of BRL 64/66 a bag (perhaps slightly better depending on the shipping and payment period), does not make the BRL 50 a bag viable in Mato Grosso. Perhaps, starting in September, when freight rates can find some stability, this situation will improve. However, we must understand that the current retention could become selling pressure from November due to the need to empty warehouses for the arrival of the soybean crop in January. Argentina’s lower export tariffs, the United States’ record crop, and Ukraine’s good crop may suggest more difficulties for Brazilian exports if we miss the best windows for sales.
The lineup shows July shipments of 2.3 mln tons, with another 2 mln to be shipped. Many vessels will likely move to August, which already has 4 mln tons in the shipping queue. Year-to-date, we have 11 mln tons committed to exports, for a projection of 42.5 mln tons in the business year. With these volumes already defined, we will need an average of 5.2 mln tons a month from September to January to reach the annual target. If the pace is faster, domestic stockpiles may be shortened and offer solid pricing conditions. Without that, current support could translate into selling pressure later this year.
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