Brazil’s Soy and Corn Crops: A Tale of Two Markets in 2024/25

Brazil’s agricultural sector remains a cornerstone of global commodity markets, and the latest updates from StoneX on the 2024/25 soybean and corn crops highlight diverging trajectories for the two commodities. While soybean output faces downward pressure due to weather and oversupply concerns, corn production is poised for growth, driven by rising domestic demand and supply chain dynamics. Investors navigating these markets must balance optimism about Brazil’s record harvests with the risks of storage bottlenecks, trade uncertainties, and climatic volatility.

Soybeans: A Record Crop, But Prices Under Siege

StoneX revised its 2024/25 soybean forecast downward to 167.5 million metric tons (MMT) from an initial 170.9 MMT, citing dry conditions in key states like Rio Grande do Sul and Paraná. Despite this cut, the harvest will still exceed the previous year’s 153 MMT, reinforcing Brazil’s status as the world’s largest soy exporter.

However, the surplus is already exerting significant downward pressure on prices. show prices dipping below $10.20 per bushel in early 2025, driven by ample supplies and weak demand. Analysts warn prices could fall 10–15% further by harvest time, as farmers rush to offload stocks amid storage shortages.

Compounding the issue is China’s retaliatory tariffs on U.S. goods, which have paradoxically boosted Brazil’s export competitiveness. March 2025 exports hit 16.09 MMT, but this volume may not offset oversupply concerns. Farmers have pre-sold 35% of the 2024/25 crop—up from 20% last year—to hedge against price declines, suggesting a race to the bottom ahead.

Corn: A Bright Spot Amid Challenges

While soybeans face headwinds, Brazil’s corn sector shows resilience. StoneX maintains its 2024/25 estimate at 126 MMT, but expects a jump to 130 MMT in 2025/26 due to strong demand for ethanol and animal feed. The second-corn crop (planted after soybeans) now accounts for 101.7 MMT, up slightly from earlier projections, as farmers expand planting areas.

Yet delays in sowing—only 9% of the corn area planted by early April—raise risks of weather-related disruptions. With July 2025 futures trading at R$70 per bag versus current port prices of R$75, farmers are holding out for better terms, selling less than 20% of expected output ahead of harvest.

The corn market also benefits from structural shifts. Fires that damaged sugarcane crops in 2024 have spurred substitution with corn, while rising livestock production boosts demand for feed. However, analysts caution that 2025/26 plantings must match or exceed 2024 levels to avoid shortages.

Risks and Wildcards

1. Storage Crisis: Brazil’s grain storage capacity is stretched to the limit, with a record soy harvest likely overwhelming infrastructure. This could force farmers to sell at fire-sale prices, exacerbating price declines.
2. Trade Dynamics: A potential deal to export corn-based DDGs to China could boost corn prices, but geopolitical tensions and tariffs remain unpredictable.
3. Climate Risks: While Brazil’s weather is favorable, heavy rains in the U.S. and dry conditions in Argentina’s Pampas could disrupt global supply chains, offering some price support.

Investment Takeaways

• Soybeans: Short positions or bearish bets on futures may be warranted, given the oversupply and storage crunch. Investors could also consider hedging via put options on soybean contracts.
• Corn: Long positions in corn futures (e.g., CBOT corn futures) or equities tied to ethanol production (e.g., Cosan (CZZ)) could benefit from rising demand and tighter supplies.
• Infrastructure Plays: Companies like Amaggi (AMAG3) or GrainCorp involved in storage and logistics may see demand rise as farmers scramble to manage surpluses.

Conclusion

Brazil’s 2024/25 crops underscore a dual narrative: soybeans face a perfect storm of oversupply and pricing pressures, while corn offers a cautiously optimistic outlook. With soy prices projected to drop further and corn prices stabilizing or rising, investors must prioritize sector-specific analysis. The 10–15% potential decline in soy prices by harvest and the 130 MMT corn target for 2025/26 are critical benchmarks. Meanwhile, storage bottlenecks and geopolitical risks loom as wildcards, demanding vigilance. For now, corn appears the safer bet in Brazil’s agricultural boom, while soybeans require a disciplined, risk-aware approach.