Brazil's record harvest puts upward pressure on soybean prices in 2025/26

Radar Agro, a monthly report from Itaú BBA's Agro Consulting, projects that the 2025/26 soybean harvest in Brazil will reach a new production record, estimated at 175 million tons. This performance should offset lower production in the United States and ensure stable global stocks, a scenario that tends to keep prices more contained on the Chicago Board of Trade (CBOT).

According to the report, the global soybean supply and demand balance for 2025/26 indicates stability, albeit with a slight decline in the stock-to-use ratio. Argentine production is expected to reach around 50 million tons, but the influence of La Niña could change this situation. The emerging climate phenomenon poses a risk of below-average rainfall in southern South America and excessive rainfall in the North, Northeast, and part of the Central-West region of Brazil.

Spring began with earlier rains than last year, favoring normal planting. Climate models project good conditions for November and December, with the exception of the extreme south of Brazil, which may experience less rainfall. "The baseline scenario is still positive for Brazil, but the evolution of La Niña in Argentina deserves attention," the consultancy notes.

Beyond the climate, the market remains attentive to trade negotiations between the United States and China. Until September, American exports posted their worst start in six years, pressured by a lack of Chinese demand. A potential agreement between the two countries could support prices in Chicago, but would reduce soybean premiums in Brazil. Otherwise, Brazilian premiums are likely to remain high, but without significant reaction on the CBOT.

Exchange rate pressure on domestic prices

Domestically, the exchange rate is seen as the main pricing factor. Itaú BBA projects the dollar at R$5,35 in 2025 and R$5,50 in 2026. The recent strengthening of the Brazilian real, amid the global weakness of the US currency, is helping to contain domestic prices, which could fall below R$100 per bag in Mato Grosso.

This movement worries producers, since production costs were formed with a higher exchange rate, between R$5,6 and R$6 per dollar. As a result, the operating margin in Sorriso (MT), which was R$3.080/ha (44%) in 2024/25, could fall to R$1.946/ha (31%) in the current harvest.

The report also highlights that sales of the 2025/26 harvest remain slow. As of August, only 20% of production had been sold, compared to 25% in the same period in 2024 and 29% on average over the last five years. The start of planting and the so-called "planting rains" could stimulate further growth in the coming weeks, but the global oversupply is likely to keep prices under pressure.

Itaú BBA's Agro Consulting firm estimates that, barring a significant crop failure in South America, soybean prices should remain at lower levels in 2025/26. Brazil's record harvest has the potential to guarantee exports exceeding 110 million tons and also increase domestic ending stocks. In this scenario, the exchange rate will continue to be the main factor sustaining or worsening Brazilian producers' profitability.