Brazil boosts soybean processing amid record harvest, putting pressure on prices

According to industry association Abiove, soybean processing capacity in Brazil will increase by 13% in 2026 compared to the previous year, to 86.4 million tons per year.

The expansion of processing capacity comes amid high demand for soybean oil, which is the main raw material for biodiesel production in Brazil, as well as for soybean meal, which is widely used in the production of animal feed.

 

7.7 billion reais, or about $1.5 billion, has already been invested in expanding existing and building new soybean processing plants.

The number of operating soybean processing plants in Brazil increased from 131 to 148, while the number of plants under construction decreased from 6 to 3.

According to Abiove's forecast, soybean processing in Brazil could reach a record 63.5 million tons in 2026.

 

At the same time, global soybean oil prices remain under pressure from other vegetable oils.

December soybean oil futures on the Chicago SWOT fell 2% yesterday to $1,489/t (-4.4% month-on-month), completely erasing the gains of recent days.

The pressure on soybean oil quotes is being exacerbated by falling palm oil prices and a seasonal increase in sunflower oil supply.

 

StoneX estimates Brazil's soybean harvest for the 2026/27 MY at a record 183.36 million tons, virtually unchanged from its previous forecast of 183.5 million tons. This is 0.4% more than in the previous season.

Soybean planting in most of Brazil's main production regions is proceeding relatively normally, reducing the risk of a second corn crop delay. However, rainfall and temperature conditions will remain key factors for the soybean harvest until the end of the year.

The combination of a record soybean harvest and increased processing capacity could increase the supply of soybean oil and meal on domestic and global markets, increasing competition with palm and sunflower oils.

 

The forecast for first-crop corn production in Brazil in the 2026/27 MY has been left at 29.3 million tons, up 2.4% year-on-year.

The increase in production should be driven by the expansion of sown areas and favorable weather in Rio Grande do Sul, where the corn harvest is estimated at 6.7 million tons.

At the same time, StoneX lowered its forecast for Brazilian corn exports in the 2025/26 MY by 2 million tons to 40 million tons. This is also lower than the 41.6 million tons exported in the previous season.

 

The forecast revision is due to increased competition from Argentina after a record harvest, less attractive prices at Brazilian ports, and growing domestic consumption.

Due to weaker exports, Brazil's opening corn stocks in the 2026/27 MY may increase to 28.57 million tons compared to 22.87 million tons a year earlier, which will also create additional pressure on the global grain market.