Soybean crush in Brazil to reach a record level on growing biodiesel demand

According to the USDA Foreign Agricultural Service (USDA FAS), soybean crush in Brazil is forecast to reach a record 62.5 mln tons in the MY 2026/27, up 2.4% from the current season. The increase is expected to be driven by the expanding use of biodiesel in the country’s fuel mix.

In its report released on 7 July, the USDA said soybean crush is expected to increase despite Brazil delaying the implementation of the planned B16 biodiesel blending mandate.

The USDA maintained its forecast for Brazil’s MY 2026/27 soybean production (February–March marketing year) at 184 mln tons, marking the country’s third consecutive record crop. However, the agency noted that crush growth will remain below the five-year average because of uncertainty surrounding future biodiesel policy and the pace of growth in biodiesel demand.

Slower expansion

The USDA also maintained its forecast for Brazil’s soybean planted area at 50.5 mln ha in MY 2026/27, up 3% from the revised 49 mln ha in MY 2025/26. However, this represents a slower expansion than the five-year average annual growth rate of 4.2%.

Most of the acreage growth is expected to occur in the Matopiba region, which includes the states of Maranhão, Tocantins, Piauí and Bahia, as well as northern Mato Grosso and parts of Pará and Maranhão. The expansion follows the removal of the soybean moratorium in early 2026, giving farmers greater flexibility to expand soybean production in the Amazon, provided they comply with Brazil’s Forest Code and the EU’s deforestation-free import requirements.

National average soybean yields are forecast to decline slightly to 3.64 t/ha, as El Niño-related weather risks and rising input costs, particularly fertilizers, are prompting some producers to reduce spending.

In the current MY 2025/26, soybean harvest has been completed on more than 99% of the planted area. Production has been revised up to a record 180 mln tons, while the national average yield is estimated at 3.66 t/ha. The state of Bahia recorded a record yield of 4.25 t/ha, one of the highest ever achieved in Brazil. Meanwhile, yields in Rio Grande do Sul remained below expectations because of uneven rainfall during flowering and pod-filling.

Biofuel demand boosts soybean oil consumption

Soybean oil production in MY 2026/27 is forecast at 12.8 mln tons. Domestic industrial consumption, including biodiesel blending, is expected to increase to 7 mln tons, up from 6.8 mln tons in the current season, despite the postponement of the mandatory B16 biodiesel blend, which had originally been scheduled for March 2026.

The report notes that continued growth in industrial soybean oil consumption is being supported by the existing biodiesel blending mandates. However, overall growth in soybean crushing continues to be constrained by uncertainty over the timing of further increases in mandatory biodiesel blending rates.

Chinese agribusiness giant COFCO announced plans to expand its soybean processing capacity by investing more than $400 mln in its facility in Mato Grosso to increase biodiesel production. Once completed, the plant will become the largest soybean processing complex in Brazil.

The facility currently crushes about 4.5 thsd tons of soybeans per day, and its capacity is expected to more than double to around 10 thsd tons/day. The plant already produces soybean meal, soybean oil and biodiesel, further strengthening COFCO’s integrated industrial network in one of Brazil’s key agricultural production and logistics hubs.