CORN: PRICES REMAIN ELEVATED IN 2025 DESPITE A RECORD HARVEST

THE CORN MARKET IN 2025 HAS SHOWN AN APPARENTLY CONTRADICTORY DYNAMIC: EVEN IN THE FACE OF A RECORD BRAZILIAN CROP, PRICES REMAINED ELEVATED THROUGHOUT MUCH OF THE YEAR, TRADING ABOVE 2024 LEVELS. CONSIDERING THE AGGREGATE OF THE THREE CROPS IN THE 2024/25 SEASON, BRAZILIAN PRODUCTION REACHED 141 MILLION METRIC TONS, A 22% INCREASE YEAR OVER YEAR, DRIVEN MAINLY BY STRONG PRODUCTIVITY GAINS IN THE SECOND CROP.

IN THE INTERNATIONAL CONTEXT, GLOBAL CORN SUPPLY REMAINED LARGELY STABLE BETWEEN THE 2023/24 AND 2024/25 SEASONS. PRODUCTION DECLINES IN COUNTRIES SUCH AS RUSSIA, THE UNITED STATES, AND UKRAINE WERE OFFSET BY INCREASES ELSEWHERE, PARTICULARLY IN BRAZIL, CHINA, AND INDIA. THIS BALANCED GLOBAL SUPPLY ENVIRONMENT HELPED LIMIT STRONGER DOWNWARD PRESSURE ON INTERNATIONAL PRICES, A FACTOR THAT ALSO FED INTO DOMESTIC MARKET DYNAMICS.

IN BRAZIL, THE START OF 2025 WAS MARKED BY A CRITICAL FACTOR: HISTORICALLY LOW CARRYOVER STOCKS, ESTIMATED AT JUST 1.8 MILLION METRIC TONS IN JANUARY. THIS EXTREMELY TIGHT STOCK POSITION PROVIDED A PRICE FLOOR, EVEN AS THE MARKET WAS ALREADY ANTICIPATING A MUCH LARGER CROP LATER IN THE YEAR.

THIS SETTING WAS COMPOUNDED BY STRONG DOMESTIC DEMAND, SELLERS’ FIRM PRICING STANCE, AND LOGISTICAL BOTTLENECKS THAT TEMPORARILY RESTRICTED SUPPLY FLOWS. AS A RESULT, CORN PRICES REMAINED ELEVATED DURING THE FIRST QUARTER OF 2025, DECOUPLED FROM THE EXPECTED EXPANSION IN PRODUCTION.

IN THE FOLLOWING MONTHS, PRICES CAME UNDER PRESSURE AS THE HARVEST OF THE SUMMER CROP ADVANCED AND SUPPLY AVAILABILITY IMPROVED. FAVORABLE WEATHER CONDITIONS SUPPORTED THE DEVELOPMENT OF THE SECOND CROP, STRENGTHENING EXPECTATIONS FOR A RECORD 2024/25 HARVEST AND INTENSIFYING DOWNWARD PRESSURE ON DOMESTIC PRICES.

AT THE BEGINNING OF THE SECOND HALF OF THE YEAR, PRICES CONTINUED TO DECLINE, DRIVEN BY WEAKER DEMAND AS MANY CONSUMERS DELAYED PURCHASES IN ANTICIPATION OF FURTHER PRICE SOFTENING. THIS BEHAVIOR WAS BASED ON THE PROGRESS OF THE SECOND CROP HARVEST AND FORECASTS CONFIRMING RECORD PRODUCTION LEVELS. AT THE SAME TIME, SLOWER EXPORT FLOWS AND THE ONGOING SECOND-CROP HARVEST LED SELLERS TO SHOW GREATER FLEXIBILITY IN NEGOTIATIONS.

HOWEVER, TOWARD THE FINAL STRETCH OF THE YEAR, FROM OCTOBER ONWARD, THE MARKET TIGHTENED AGAIN. PRODUCERS BEGAN TO WITHHOLD SUPPLY FROM THE SPOT MARKET, A MOVE THAT, COMBINED WITH REPORTED DIFFICULTIES IN REBUILDING INVENTORIES, PROVIDED FRESH SUPPORT TO PRICES THROUGH MID-DECEMBER.

THE CORN MARKET IN 2025 CLEARLY DEMONSTRATES THAT PRICE FORMATION DEPENDS ON FAR MORE THAN TOTAL PRODUCTION VOLUMES ALONE. FACTORS SUCH AS OPENING STOCKS, DEMAND DYNAMICS, LOGISTICS, AND PRODUCERS’ MARKETING STRATEGIES PLAY A DECISIVE ROLE. EVEN IN A YEAR OF RECORD HARVESTS, ABUNDANT SUPPLY DOES NOT NECESSARILY TRANSLATE INTO LOW PRICES.