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Brazil's soybean sector is projected for significant growth in the coming years, with domestic soybean crush volumes anticipated to hit a record 62.5 million tons in the 2026/27 marketing year. This marks a 2.4% increase from the current season, according to a report by the USDA Foreign Agricultural Service (USDA FAS).
The surge in crushing activity is primarily attributed to rising demand from the biodiesel industry. Despite the postponement of the mandatory B16 biodiesel blend, domestic industrial consumption of soybean oil is expected to continue its upward trajectory. The USDA forecasts industrial soybean oil use at 7 million tons in 2026/27, compared with 6.8 million tons in the current season, underpinned by existing biodiesel blending requirements.
The USDA also maintained its forecast for Brazil's soybean crop at 184 million tons, which would constitute a third consecutive record harvest. Soybean planted area is projected to expand to 50.5 million hectares, although this growth will be slower than the five-year average due to uncertainty surrounding future biodiesel policy and elevated production costs.
Most of this expansion is expected in the MATOPIBA region, as well as northern Mato Grosso and parts of Pará and Maranhão. Concurrently, the national average yield is forecast to ease slightly to 3.64 tons per hectare, influenced by El Niño-related weather risks and higher fertilizer expenses. In the current 2025/26 season, Brazil has already harvested a record 180 million tons with an average yield of 3.66 tons per hectare.
Private investment is also bolstering the expansion of Brazil's processing industry. Chinese agribusiness giant COFCO is investing over $400 million to enlarge its soybean processing facility in Mato Grosso. Once completed, the plant is set to become the country's largest soybean crushing complex, increasing its daily processing capacity from approximately 4.5 thousand tons to 10 thousand tons.
Furthermore, the USDA predicts another record for Brazil's soybean exports, expected to reach 117.5 million tons in 2026/27, up from 115 million tons in the current season. China is anticipated to remain the leading buyer, though export growth is projected to slow due to increased domestic processing and stronger competition from Argentina. Soybean meal exports are forecast to climb to 26 million tons, supported by robust demand from Southeast Asia and the European Union.
Despite these optimistic production and export forecasts, Brazilian farmers continue to grapple with rising production costs. Soybean production costs in Mato Grosso have increased by nearly 8% over the past year, driven by higher fertilizer and labor expenses, while high interest rates persist in limiting investment. However, the relatively weak Brazilian real is expected to support the country's export competitiveness, helping Brazil solidify its standing in the global soybean market.
Source: UkrAgroConsult