Porto Alegre, May 29, 2026 – Although the weather situation is practically no longer having much effect on domestic prices of corn going forward, the market is attempting some speculative movement based on isolated situations. There are some conjectures regarding upcoming frosts, as well as reasonable crop of corn losses in Goiás and Minas Gerais and perhaps Tocantins, but in general Brazil’s 2026 safrinha crop will begin entering the harvest phase in June, with supplies becoming more concentrated in July and August this year. This transition from the end of the summer crop to the safrinha establishes some demand and some regional movement, though without providing consistent solidity for prices. We noticed this movement in Mato Grosso last week, with ethanol plants and exporters accelerating purchases of large lots of corn, especially in deals involving tax credits. In any case, the fact remains that port prices holding at R$ 66 for July through September shipments does not inspire major improvements in domestic prices, especially considering that over the next ninety days 99 million tons of corn will enter the market, along with another 5 million tons of sorghum and the Paraguayan crop totaling 6 million tons. For prices to rise in this supply environment, a new factor is needed, which essentially comes down to the U.S. crop of corn or the exchange rate.
With the new Federal Reserve chairman taking office this month, expectations are building regarding upcoming decisions involving interest rates and, above all, the institution’s operating models in financial markets concerning asset composition. Indicators such as employment, economic activity, and inflation will continue to guide interest rate and monetary policy decisions. However, we should expect important changes in the structure of local monetary policy, in a way that provides support for lower interest rates over the medium term.
For now, the focus remains on high wholesale inflation, which has accumulated 5.2% over the last twelve months, well above the Fed’s targets and potentially impacting retail inflation. Expensive oil, though more stable at high price levels, has not yet become a traumatic point for local and global inflation, despite the difficulties and risks the war has brought to energy markets. Oil volatility during the week increased with renewed risks of armed conflict escalation and the lack of any forecast for the reopening of the Strait of Hormuz. By the end of the week, news reports indicated that there was a preliminary agreement between the U.S. and Iran to end the war, with details to be negotiated over the weekend.
The end of the war will not immediately normalize commodity flows through the Strait of Hormuz region, partly due to the strong backlog and accumulation of goods in the area. However, the mere prospect of improved flow could push oil prices down toward US$ 80/barrel in New York initially, before later returning to normal trade conditions. If economic sanctions against Iran are lifted, this process could happen even faster.
Against this backdrop, long-term Treasury yields eased again, with five-year notes falling to 4.25%. This even brought some stabilization to the Brazilian real during the week, with the currency once again testing levels below R$ 5.00/US$. However, on the upcoming 17th there will be a Fed meeting, with no expectation of changes to local U.S. rates, while Brazil’s Copom meeting carries the possibility of at least a 0.25% rate cut. The end of the war may lead Copom to believe that inflation risks have subsided and suggest that Brazil could reduce interest rates more rapidly heading into elections.
This perception is clearly reflected in exchange-rate movements. A calmer external environment, lower domestic risks, and the chance for the Central Bank to cut rates. With falling interest rates relative to abroad, arbitrage weakens and the real may move into a depreciation environment if this is enough to reduce or reverse capital inflows. The fact is that the Brazilian economy is being paralyzed by the combination of high interest rates, excessive taxation, and an overvalued currency, especially when it comes to agribusiness.
U.S.: Sales of corn for the Season Reach 80 MMT
While the 2026 U.S. corn crop continues to develop, there is one piece of information regarding the old crop, 2025, that has been surprising. Weekly sales had already been accumulating at elevated levels, as we have pointed out in previous reports. However, they reached 80 million tons last week, with three months still remaining before the end of the marketing year. This could lead the USDA to raise its annual export projection and reduce ending stocks for the current marketing year, a situation that could help contain stock growth for the new crop.
U.S. corn planting continues within an ideal window and under excellent conditions. Last week, planting reached 76%, in line with the 2025 crop and above the five-year average. Crop conditions are normal despite excessive rainfall in some states. Iowa, the largest producer, has planted 88% and is expected to complete fieldwork before the May 30 window closes. Some reduction in rainfall across the Great Lakes region over the next two weeks is still not becoming a major speculative issue.
Therefore, from the standpoint of weather and U.S. planting progress, there is still no major indicator capable of generating speculative price movements at this stage. June and July will be crucial months for crop development and the onset of pollination and tasseling in July. With planting progressing normally, the focus will now shift toward two important indicators: the first estimate of actual planted area on June 30 and revisions to export projections for the current marketing year.
U.S. weekly sales of corn have been surprising since September 2025. The USDA projected an exceptionally large number, nearly 84 million tons for the 2025/26 marketing year. Undoubtedly, this was a difficult number to imagine in the initial expectations. Now, however, the figure may actually be exceeded due to the abnormal pace of U.S. sales. Last week, weekly sales reached 2.1 million tons, an extremely strong pace for this period of the year and the U.S. marketing cycle.
Sales have now accumulated to 80 million tons, with one more week of trading left to close May and still three months remaining before the marketing year ends in late August. Shipments reached 58.5 million tons through last week, following the pace of sales, compared to 45.5 million tons in the same period last year. The issue now is how USDA analysts will decide to adjust the annual supply and demand balance. With three months remaining before the end of the marketing year, sales are already approaching the annual forecast. The USDA may choose to postpone adjustments until later, perhaps in August, waiting for actual shipments to confirm the numbers, or it may gradually adjust projections in June and July to align with reality.
This adjustment will determine whether ending stocks could fall somewhat below the currently projected 54.4 million tons. A reduction in these stocks could help limit growth in new-crop inventories, currently projected at 50 million tons.
The surprise from these strong U.S. export numbers is that other exporters have not lost sales momentum. Brazil is having a normal first half, with sales that have actually been good considering low prices. Argentina is posting an excellent start to its export season. Export registrations have now reached 16.9 million tons, with shipments totaling 12.2 million tons so far. Ukraine’s prices are rising, indicating that sales momentum there is also not slowing. This represents a strong global demand cycle for the four major exporters.
