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According to the industry association Abiove, Brazil is poised to expand its soybean processing capacity by 13% by 2026 compared to the previous year, reaching an annual capacity of 86.4 million tons. This strategic growth is fueled by robust demand for soybean oil, which serves as the primary feedstock for Brazil's biodiesel production, and soybean meal, an essential component for the domestic and international animal feed industries.
A substantial investment of 7.7 billion reais, approximately $1.5 billion, has been committed to upgrading existing facilities and constructing new processing plants. This industrial push is evidenced by the rise in operational plants from 131 to 148, while the number of sites currently under construction has dropped from six to three as projects reach completion. Abiove forecasts that actual soybean processing could hit a record-breaking 63.5 million tons by 2026.
Despite these internal gains, international soybean oil prices remain under significant pressure from the broader vegetable oil complex. On the Chicago exchange, December soybean oil futures recently declined by 2% to $1,489 per ton, marking a 4.4% drop month-on-month and erasing recent price gains. This downward trend is compounded by weakening palm oil prices and the seasonal influx of sunflower oil supplies entering the market.
Regarding crop production, StoneX has maintained its record forecast for Brazil's 2026/27 soybean harvest at 183.36 million tons, a 0.4% increase over the previous season. Planting progress across major production belts remains largely on schedule, which helps mitigate risks for the subsequent second-crop corn cycle. However, market analysts emphasize that rainfall patterns and temperatures through the end of the year will be the ultimate determinants of final yields.
In the corn sector, first-crop production for the 2026/27 marketing year is estimated at 29.3 million tons, up 2.4% year-on-year, thanks to favorable weather in regions like Rio Grande do Sul. Conversely, StoneX lowered its forecast for Brazilian corn exports for the 2025/26 season to 40 million tons, citing increased competition from a bumper Argentine harvest and rising domestic consumption. Consequently, Brazil's opening corn stocks for 2026/27 are expected to rise to 28.57 million tons, adding further supply pressure to the global grain markets.
Source: Electronic Grain Exchange of Ukraine