Brazil expects to produce and export record soybean volumes in the 2025-26 season, despite concerns over adverse weather and uncertainties regarding prices and Chinese demand.
National supply company Conab estimates production will reach a record 177.1mn metric tonnes (t), although some market participants foresee output surpassing 180mn t. The 2024-25 soybean crop reached an all-time high of 171.5mn t, according to Conab.
Yearly volume gains follow another season of acreage expansion, which has been a trend since the 2007-08 crop. Planted area may climb by 3.4pc this season to 48.9mn hectares (489,000km²), Conab data show. That surpasses market participants' expectations for the lowest increase in almost 20 years, with rising production costs and difficult access to credit lines for farmers.
Despite these challenges, producers opted to continue increasing investments in the oilseed. Soybeans are their main revenue source, supported by firm demand from China. Brazilian exports should total an unprecedented 112mn t in 2026. That compares with the current record of 107mn t from 2025, according to Conab
The US Department of Agriculture forecasts Chinese imports to rise by 4mn t to 112mn t in the 2025-26 season from the prior cycle. China has acquired at least 70pc of Brazil's soybean exports each year since 2020, according to national association of cereal exporters Anec. If China maintains a minimum share of 70pc, it would receive approximately 78.4mn t of Brazilian soybeans next year.
Market participants remain confident that Brazil should post another strong year for exports, with China maintaining a large share in the Brazilian market over the upcoming years. The overall terms of the US-China deal should not pose any threat to the Brazilian market, according to market participants. China has reportedly pledged to buy 25mn t/yr from the US through 2028, yet volumes ranged from 25.9mn-32.mn t in 2020-2024, GTT and Chinese customs data show.
But they fear that China may delay its return to the Brazilian market. That is because late purchases from the US could ensure Chinese buyers have full stocks once Brazil starts its export season in February. China agreed to acquire 12mn t of US soybeans before the Brazilian export season.
The absent Chinese demand could lead to a price plunge once harvesting advances, as record volumes become available for the market. Brazil also has a problem with an ever-deficient storage capacity, which could prompt farmers to lower prices as much as possible to attract buyers.
Record production is always a factor that pressures prices downwards. The US-China trade war managed to support Brazilian port differentials during the 2024-25 season, which accounts for the current record. But the 2022-23 crop registered record-low prices in the Paranagua paper market. Bids for April — which is usually the export season peak — were at a premium of 21¢/bushel (bu) to the CBOT in early 2023. Consecutive losses led to a 90¢/bu discount as of 31 March 2023.
Brazil supply may be lower than expected
Market participants worry that unfavorable weather conditions could lower production and export volumes. But the sparse occurrence of these adverse weather episodes is unlikely to be enough to pull volumes below last season's 171.5mn t.
Central-western Mato Grosso state takes the spotlight in this matter. Its institute of agricultural economics Imea reported irregular rainfall throughout October. Some regions did not receive rain for 10 consecutive days at the time. Dry weather conditions turned planting unfeasible, because soil moisture is necessary for plant germination. It also hindered crop development in the initial phases.
Market participants estimate that the total resown in Mato Grosso will reach approximately 2pc of the expected acreage this season, while the national average is closer to 1pc. A severe drought caused the 2023-24 season's results to fall short of initial estimates and led to a record replanting level of 8pc, according to market participants.
Central-western Goias and southern Parana states also registered above-average replanting rates. These are expected to be the second and fourth largest soybean producers this crop, respectively. Goias is struggling with irregular rainfall. Water restrictions are causing resowing in its southern and eastern portions. Parana was hit by heavy rains in early November, which intensified into hailstorms, windstorms, flash floods and an extratropical cyclone. Most affected regions registered soil erosion and complete losses.
Rio Grande do Sul state — the second-largest soybean producer — is also facing issues with hydric stress. Some market participants are already saying that there will be cuts in the production outlook. Areas sown after 15 November exhibit uneven growing patterns due to water restriction, according to regional rural agency Emater-RS.
