Porto Alegre, February 27th, 2025 – This week, at the end of February, the traditional USDA Forum will take place, an event that discusses the entire US agribusiness and issues reports with some projections. With the South American crop almost defined, the international market tends to focus on the next US planting. At this USDA event, some indications, for statistical purposes of the event, are reported, such as the Baseline, but the actual data from the planting intention survey is only released on March 31. In the meantime, the market is based on the most obvious facts, that is, the weekly exports, which have been very aggressive and above the USDA projection line for this business year. This is the major support point for corn on the CBOT at the moment.
In all our newsletters, we have drawn attention to the flow of US sales each week. Last week, sales reached 1.45 mln tons, that is, above the technical level of 1 mln a week. The total now stands at 48 mln tons compared to USDA’s full-year estimate of 62 mln tons, with only 14 mln tons remaining for the next 23 weeks until the end of the business year. This situation suggests that USDA will need to revise its business year export estimate upward.
The market will need to ration consumption, particularly in exports. Sales are spread across several buyers and it is not a case of a single stance by importers for the outcome, as could happen with Mexico, for example. In fact, Mexico anticipated many movements due to its government’s attempt to restrict the import of GM corn, but that was at the beginning of the US crop. Today, Mexico’s accumulated purchases are only 500 thousand tons above the previous year, which is a normal level.
The biggest issue is that Brazil failed to export a good volume in 2024 compared to 2023. In 2023, sales totaled 55 mln tons, against 38.5 mln in 2024. This difference was being directed to imports from other sources such as Argentina and the United States at this time in the international environment. So, the reduction in supply from Brazil shifted part of the global demand to US corn, as happened with Japan and other important buyers.
Therefore, the market will need to raise prices and premiums in the Gulf of Mexico to contain this export demand and avoid a greater reduction in stocks. Lower prices from now on will only encourage further exports and the reduction of old-crop stocks. After breaking the USD 5.00/bushel barrier for the May and July maturities, this trend in exports will be essential for consolidating prices.
This week, at the end of February, the traditional USDA Forum will take place, which aims to discuss the entire US agribusiness. At this event, proposals and projections emerge as relevant points for the development of local agriculture. We must consider that the data on the area to be planted for 2025 is a view from the department’s analyst and does not yet reflect a practical survey of planting intentions with growers.
The only report on planting intentions is released on March 31 and represents a real survey with growers. In fact, the market is beginning to define a consensus for planting, which is an area going back to 94 to 95 mln acres for corn, even in view of the strong demand for urea registered in the local market, while the soybean area would have a slight reduction to 84 mln acres. Without La Niña and with a neutral climate, the initial expectation is for good rainfall for the initial planting period, perhaps even above average.
Meanwhile, the Argentine crop is being defined, with some evident conflicts between the excessive production cuts by the Rosario Exchange and the more restrained assessment by the Buenos Aires Cereals Exchange. However, estimates have been maintained, and for corn and soybeans the figures between 48 and 49 mln tons are plausible at this time. The rain in the second half of February were quite satisfactory for most of the producing region of Argentina. We can say that losses have ceased in the local crop, we still have the month of March to assess, but the climate effects related to South America are dissipating and are increasingly less consistent to sustain prices on the CBOT, especially for soybeans.
Safras News
