- Bearish soybeans: Brazil’s record 180 million tonne crop and slow farmer selling keep export supply heavy through Q2, pressuring CBOT futures.
- Argentine risk: Moisture stress and poor rainfall since early February threaten to trim Argentina’s soybean output toward 45–48 million tonnes.
- Regional impact: South American export dominance and ample pipeline supply reduce competitiveness for Black Sea soybean offerings.
South America Soybean Production Outlook
Argentina’s 2025/26 soybean crop is entering a critical phase under mounting moisture stress. Farmers completed planting in January, but insufficient rainfall since early February has created severe soil moisture deficits across key producing areas, including Córdoba, La Pampa, southern Santa Fe Province, and parts of Buenos Aires. The Buenos Aires Grain Exchange cut its harvest forecast by 1 million tonnes to 48 million tonnes, while broader market estimates now span 45–48 million tonnes, down from initial expectations of 48–50 million tonnes.
Crop ratings as of late January showed an improved starting point versus last season, with 53% of soybean area in good to excellent condition, 34% fair, and 13% poor to very poor, compared with 26%, 50%, and 24% a year earlier. Nonetheless, agronomists warn that production potential will erode quickly without meaningful precipitation in the next two to four weeks, and weather models remain divided over mid-February rainfall outcomes.
Brazilian Harvest and Farmer Selling
In contrast, Brazil’s soybean harvest is advancing at full speed in most producing states, underpinning expectations for a record 180 million tonne crop. Despite supportive fundamentals, domestic pricing is weighed down by a stronger local currency, high transportation costs, and abundant supply. These factors have slowed farmer selling, with Safras & Mercado estimating that only 33.9% of the new crop had been sold, roughly 10 percentage points below the historical average, though still about 10 million tonnes ahead of last season’s pace.
Even with delayed commercialization, export flows remain robust. The Brazilian exporters association (Anec) projects soybean shipments of around 14 million tonnes for January–February combined, confirming Brazil’s role as the dominant supplier during the first half of the year and offsetting much of the weather-related uncertainty in Argentina.
Market Impact and Black Sea Competitiveness
For global markets, Brazil’s record harvest and the backlog of unsold beans are clearly bearish for international soybean prices. Ample nearby supply and aggressive Brazilian export programs are expected to cap rallies on CBOT, even as traders watch Argentine weather risk. This environment is particularly negative for Black Sea soybean exporters, whose competitiveness is eroded by South America’s scale, logistics, and willingness to sell into a weak price environment.
In the weeks ahead, price direction will hinge on whether Argentina receives timely rainfall to stabilize yield potential. Continued dryness could justify a further downgrade in Argentine production estimates, offering temporary support to futures. However, unless losses become severe, Brazil’s oversized crop and heavy export pipeline should continue to anchor global soybean values through at least the second quarter.
Source: Market Data
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