El Niño could reduce Brazil’s soybean crop by 17.6 mln tons

A strong El Niño could reduce Brazil’s soybean production in the MY 2026/27 by 17.6 mln tons, or 9.7%, compared with a neutral weather scenario. According to a study by Serasa Experian, if weather conditions replicate those of the 2023/24 season, the country’s soybean crop could reach only 163.6 mln tons, compared with a potential 181.2 mln tons in the absence of major climate anomalies. Such a development could significantly affect global soybean supplies and reshape international trade flows.

Analysts note that current weather conditions in Brazil pose no immediate threat to the new crop, which is why the market has yet to react to the downside scenario. As of November 6, the two-week weather forecast called for around 99 mm of rainfall in Mato Grosso, one of the country’s largest soybean-producing states. However, January will be the critical period for determining yields, as soybean plants enter their reproductive growth stage. El Niño is expected to peak in November before gradually weakening over the following months.

If the downside scenario materializes, global soybean prices could rise sharply. According to Allendale chief strategist Rich Nelson, a decline in Brazil’s crop to the level outlined by Serasa Experian could push US soybean futures to $18–19 per bushel, compared with approximately $12 in early November. Meanwhile, CoBank lead economist Tanner Ehmke has a more moderate outlook, suggesting that prices could rise to $13–14 per bushel if adverse weather begins to threaten production prospects.

A potential crop decline would also affect global soybean trade flows. According to Allendale estimates, Brazil’s exports could fall by approximately 437 mln bushels, or nearly 11.9 mln tons, under such a scenario. At the same time, the United States could potentially gain around 350 mln bushels of additional export demand, equivalent to approximately 9.5 mln tons. This additional demand could significantly reduce US soybean inventories, which USDA had projected at 315 mln bushels for the 2026/27 marketing year.

The US soybean market is also supported by strong demand from biofuel producers and a recovery in Chinese purchases. China has indicated plans to buy 25 mln tons of US soybeans in 2026/27. Meanwhile, USDA forecasts a record US soybean crop of 4.56 bln bushels, up 7.1% from the previous year. Future price movements will depend primarily on weather conditions in Brazil’s key soybean-producing regions over the coming months.

Tags: weather conditions, Brazil, soybean