Insight Focus
The USDA expects global soybean production to reach a record 442.3 million tonnes in 2026/27. Almost all growth comes from larger crops in the US and Brazil. Strong demand and export sales have supported soybean prices despite the larger crop outlook. Meanwhile, uncertainty over Brazil’s next crop and the risk of a strong El Niño could shape market direction in the months ahead.
Record Global Soybean Crop Forecast Boosted by US and Brazil
The USDA’s August 2026 WASDE projected record-high world soybean output of 442.25 million tonnes for 2026/27, up 12.79 million tonnes from the previous year. The US (up nearly 7 million tonnes) and Brazil (up 5.5 million tonnes) account for nearly all of the growth in 2026/27 soybean production projected by USDA. Smaller increases of 1 million tonnes or less are projected for Uruguay, Argentina, Canada and India, while decreases are projected for Ukraine, Paraguay and Russia.
Source: USDA
Among major US crops, soybeans are the only one for which USDA projected an increase in output in 2026/27 in the August WASDE. USDA raised its estimate of soybean planted acreage by 1.4 million acres, offsetting a cut in its yield estimate of 0.2 bushels per acre. USDA raised its projection of US soybean output for 2026/27 by 44 million bushels to 4.5 billion bushels. In contrast, USDA projects a 1-million-bushel decrease in US corn production, as well as smaller decreases in production of wheat, rice, sorghum, barley, oats, cotton and sugar.
Heavy rains and flooding in some US states raised questions about whether yields would reach USDA’s projection. An August crop tour by the private group Pro Farmer attracted attention for its downgraded assessment of corn yields, but its 53.3 bushel-per-acre estimate of average soybean yield was higher than last year’s estimate and close to USDA’s estimate for 2026/27.
Pro Farmer highlighted “pockets of potential” for soybeans and commented that late-season weather could impact the final yield. Some other analysts downplayed the impacts of flooding but noted that excessive moisture raises the risk of plant disease ahead of the harvest.
Soybean Prices Climb Despite Larger Crop Forecast
US soybean futures prices rallied during mid-August despite seemingly bearish USDA output projections. The November contract rose from under USD 11.50/bushel on August 11 to USD 12.22/bushel on August 19. This was close to the July high of USD 12.50 and one of the few periods during the 2025/26 market year that prices rose above USD 12. The soybean market rally was subdued compared with a concurrent spike in corn prices that followed the Pro Farmer crop tour.
Source: CBOT
Robust demand contributed to the strength in US soybean prices. USDA’s August WASDE projected increases in domestic soybean consumption (up 122 million bushels in 2026/27) as well as a rebound in exports (up 140 million bushels in 2026/27). With crush margins remaining strong, crush volume was unusually high during the summer months as inventories from the 2025 harvest dwindled.
Demand for Soybean Products Remains Robust
On the export front, USDA data showed that China’s purchases of old-crop soybeans were near 12.5 million tonnes (exceeding China’s commitment for 2025), and China’s purchases of new-crop soybeans for the 2026/27 market year totalled 6.558 million tonnes (24% of its commitment for 2026) as of August 21. Sales of new-crop soybeans to unknown destinations reached 4.69 million tonnes.
The rising use of soybean oil for biodiesel fuel in the US has strengthened the link between soybeans and global energy markets. As a result, renewed increases in petroleum prices boosted soy oil prices during August, in turn adding upward momentum to soybean prices. USDA projected year-over-year growth of 2,800 million pounds in domestic consumption of US soybean oil for 2026/27, while projecting a decline in soybean oil exports of 575 million pounds.
In contrast, US soybean meal is mostly destined for export markets. The USDA projected that US soybean meal exports will increase by 2.2 million short tons (1.995 million tonnes) year over year in 2026/27. Export growth far exceeds projected growth in domestic consumption of 325,000 short tons. The USDA cited growing demand for soybean meal in foreign markets, including the Philippines, Mexico, Thailand, Turkey, the EU and Ecuador.
The USDA projected a USD 1/bushel increase in soybean farm prices to USD 11.40/bushel in 2026/27 and a 6c/lb increase in soybean oil prices. The USDA also projected that soybean meal prices will fall by USD 10/short ton in 2026/27.
Source: USDA
El Niño and Financial Pressures Cloud Brazil’s Soybean Outlook
Uncertainty about Brazil’s next soybean crop is also beginning to shape assessments of the 2026/27 market. With planting beginning in September, most analysts expect another increase in Brazil’s soybean acreage.
However, growth could be muted by rising production costs, high interest rates and reports of farm financial stress. While USDA projects another increase in Brazilian output, some analysts are predicting slower growth or even a decline. Rabobank, for example, forecast a 2% decline in production to 178 million tonnes.
Brazil’s crop could be impacted by this year’s El Niño, which is expected to be one of the strongest on record. El Niño typically results in wet weather in southern Brazil and dry conditions in the country’s north, which could delay planting or cause extreme drought in different parts of the country. The outcome remains uncertain since the crop has not yet been planted.
