By Dayanne Sousa and Meg Lopes
In the world’s top soybean exporter Brazil, farmers long accustomed to chasing record harvests are suddenly confronting a new worry: the threat of producing far more than the world can absorb, just as US President Donald Trump is reshaping global trade flows.
A record 177.1 million tons of soybeans are expected to be collected in the harvest that starts early in 2026, Brazil’s crop agency Conab said Thursday — a minor cut from previous estimates and still a 3.3% boost from last year. That raises the possibility of an escalating oversupply problem that pushes global prices lower.
“We’re growing at a scale that’s greater than demand,” said Thiago Facco, vice president of producers’ group Aprosoja Tocantins. He said that while output this year will fit the market’s needs well, “in a very near future we will have excess production.”
The situation threatens to intensify pressure across a market already rattled by fragile geopolitics. Trump is pressing Beijing to purchase more soybeans, even as China has spent years shifting purchases toward South America. If Brazil floods the market with even cheaper supplies, U.S. farmers could face sharper competition.
But a bigger risk for Brazil is if China comes through as promised with big purchases of U.S. soybeans, leaving Brazilian shipments sidelined just as the country’s own harvest accelerates. That would likely cause domestic stockpiles to swell, just as they did in the U.S. recently as farmers faced an oversupply ahead of a trade deal between Trump and Chinese leader Xi Jinping. The result would be a further erosion of margins for Brazilian growers already squeezed by rising costs and high interest rates.
Abiove, the soybean crushers’ group, expects Brazil’s ending stockpiles in 2026 to be the highest in nine years, even as local processing increases to meet the country’s rising biodiesel blend mandate.
“In 2025, Brazil had a bumper harvest but exported very well because there was a trade war,” said AgRural analyst Daniele Siqueira. “For 2026, there is no such guarantee,” she added. “Brazil may have an oversupply that could weigh on prices.”
Soybean futures traded in Chicago are up about 8% this year, but have recently trimmed gains as China’s purchases of U.S. shipments have been far short of the 12 million tons promised by the end of the season. The U.S. says the Asian nation has also pledged to buy at least 25 million tons annually for the next three years.
“If the potential for a record South American crop is confirmed, we could see some type of price realization in Chicago,” said Francisco Queiroz, an analyst at Itaú BBA bank.
Most market analysts agree Brazil is headed for a bumper crop, with consultancy Agroconsult recently estimating production at 178 million tons. That’s more than the 175 million tons estimated by the U.S. Department of Agriculture. If the higher numbers prove right, Brazil may help cushion an expected decline in global production compared to the prior season, which was a record by USDA estimates. At the same time, the supply growth will likely outpace increasing global demand.
Weather remains a wild card. Irregular rains tied to La Nina weather patterns could hurt crop development in the south of Brazil and in Argentina. But if no major crop failure occurs and harvest proceeds normally by February, Brazil will likely have to deal with ballooning inventories.
Brazilian soy exports boomed in 2025 as Chinese buyers favored the country’s beans amid trade tensions with the U.S.. The nation shipped a record 104.8 million tons of soybeans this year through November, and 79% of that went to China. Meanwhile, total sales of U.S. soy to China have reached about 3.2 million tons since the tentative agreement in October, according to the USDA.
Meanwhile, Brazilian acreage continues to expand. Farmers will plant 48.9 million hectares (120.8 million acres) of soy this season, up 3.4% from the previous season, Conab said, despite higher fertilizer costs and steep interest rates that have left many growers heavily indebted. Unlike the U.S., where farmers shift acreage between soy or corn, Brazil’s climate allows back-to-back soybean and corn crops. Soy has also been replacing pastureland and some rice areas, according to Conab.
“Margins are very tight, sometimes even negative for soybeans,” said farmer Lucas Beber, president of the producers’ group in top soy-growing state of Mato Grosso. “The hope lies in corn.”
While farmers who made recent plans to expand their crop area are unlikely to give up, weak margins will probably force Brazilian producers to decelerate the pace of expansion, said Felipe Jordy, market advisory and intelligence manager at Biond Agro.
“Anyone who is already working on opening new areas is not going to stop, but they will slow down, and they will reconsider some of it,” Jordy said.
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