The Wednesday HOT TAKE
June 4
Ten HOT Nuggets
I usually spend a lot of time talking about beans and soybean oil, but today’s update shifts the spotlight to our favorite yellow stuff - corn - which has become a major source of frustration for both farmers and traders in recent weeks.
10 | Look out below!
That crashing sound you hear is the price of cash corn in the heart of Brazil’s top-producing state taking a 40% nosedive over the past month, as favorable weather continues to boost Safrinha yield prospects.
9 | Robbing Peter to pay Paul
I am not saying a crash in domestic cash prices fixes Brazil’s tight stocks situation (both for the current crop year and prospects for 25/26).
What I am saying, however, is any additional supply contributes to easing prices.
That naturally leaves Brazil in position to bolster corn exports - being more price competitive - and satisfies some of the growing domestic demand that has been a big driver in capping exports the past few years.
Check out these changes:
From 2022/23 to the 2023/24 marketing year:
« Production -13%
« Exports -29.4%
« Ethanol demand +23%
From 2023/24 to the current marketing year:
Production +9% (this number likely grows)
Exports +12% (6 months ago this was set to be +25% YoY)
Ethanol +23% (6 months ago this was +0% YoY)
Looking at both last year (2023/24) and the current marketing year’s (2024/25) cumulative changes over the past several WASDEs - the trend is clear: exports are losing steam:
At the same time, ethanol demand continues to grow - directly related to the reduction in exports:
