South American harvest to pressure oilseed markets
By Bruce Burnett
The 2025-26 harvest is just getting underway in northern Brazil, although the main harvest is still two to three weeks away in Mato Grosso.
Mato Grosso is the largest soybean producing state in Brazil. The growing season is quite complex with harvest stretching from January to April in the world’s largest soybean producer.
The reason is that the traditional cropped areas in the south have a completely different growing season than the tropical north.
The northern areas of Brazil double crop their land with soybeans, which are quickly followed by corn or another summer crop.
Southern areas plant their crops later and will usually only double crop after harvesting winter wheat. The harvest in the south runs from late February through May.
The soybean crop in Brazil is expected to reach a new record of 175 to 180 million tonnes in 2025-26.
Record soybean production will cause Brazilian prices to drop, which will provide strong competition for U.S. soybeans in China.
This is not good news for U.S. futures markets, which have seen a sharp decline since hitting recent highs in November.
The large harvest in South America heralds the beginning of a potential large surplus in soybean production during the 2026-27 marketing year.
U.S. farmers are expected to increase their area of soybeans by four to six per cent in 2026. If weather is close to average in 2026, then U.S. production will increase from this year.
Increased production in 2026 will push supplies of U.S. soybeans even higher. This will create a significant surplus of soybeans in the largest producing countries.
China has guaranteed purchases of 12 million tonnes this year, but this will not be sufficient to absorb the surplus production. This is not good news for canola or any other vegetable oil crop pricing in the coming months.
The oilseed complex is going through a dramatic repricing adjustment as production catches up with demand growth.
Weather will still be a factor in determining price levels in 2026, but the overall situation is not bullish for oilseeds.
This article has been republished from The Western Producer.