South American weather risks keep global corn and soybean markets on edge

Global corn and soybean markets remain highly sensitive to weather developments in South America, where Brazil and Argentina play a critical role in shaping global supply. While Brazil is on track to harvest a record soybean crop, unfavorable conditions in southern regions and persistent dryness in Argentina are raising concerns about final production and export potential.

Brazil’s soybean harvest is approximately 25% complete, broadly in line with the five-year average. Total production for the 2025/26 season is expected to reach around 180 million tonnes, which would mark a new record driven mainly by expanded planted area. However, below-average rainfall in the southern state of Rio Grande do Sul is creating uncertainty around yield potential, as crops remain in key reproductive stages. Despite these risks, Brazilian soybeans remain competitively priced compared to U.S. origin, supporting strong export demand.

In Argentina, the outlook is more concerning due to ongoing moisture deficits across major agricultural regions. After a favorable start to the season, rainfall declined significantly, leaving soil moisture reserves critically low. Both corn and soybean crops are currently in reproductive phases, when yields are most vulnerable to weather stress. Without sustained rainfall in the coming weeks, current production and export forecasts may need to be revised lower, adding volatility to global markets.

Argentina’s soybean exports are expected to return to more typical levels following unusually strong shipments in the previous season. Last year’s surge was driven by temporary export tax cuts and increased Chinese demand amid trade tensions with the United States. This season, soybean production is projected at around 48 million tonnes, and reduced planted area is likely to limit export availability.

Meanwhile, the United States harvested a record corn crop of approximately 17 billion bushels, supporting a strong and diversified export campaign. Shipments have been driven by demand from Mexico, Japan, South Korea, North Africa, and the European Union. However, increased competition from South America, particularly if Argentine crop conditions improve, could limit further U.S. export growth.

U.S. soybean exports have also been reshaped by trade tensions with China, which delayed and spread out Chinese purchases compared to typical seasonal patterns. More competitive Brazilian prices continue to limit additional demand for U.S. soybeans, reinforcing South America’s dominant role in global supply.

The soybean-to-corn price ratio remains elevated, encouraging farmers to favor soybean plantings in the upcoming season. However, this could lead to higher ending stocks and potential downward pressure on prices. Weather conditions in Argentina over the next several weeks will remain a key factor influencing global corn and soybean market direction.

Tags: soybean, USA, Argentina, China, Brazil