Brazil’s 2026/27 Soybean Exports Forecast to Hit 117.5 Mt Record on Domestic Biodiesel Surge

Brazilian soybean exports are forecast to hit a new record high of 117.5 million metric tons (Mt) for the 2026/2027 marketing year, up from an estimated 115 Mt in the current season, as strong production coincides with a structural rise in domestic demand for biodiesel feedstocks. The revised forecast, according to the United States Department of Agriculture Foreign Agricultural Service (USDA FAS), reinforces Brazil's position as the world's dominant soybean supplier and signals sustained long-term growth for soybean crushers and biofuel producers. The export surge is underpinned by a massive production outlook, with local consultancy Safras & Mercado estimating the 2026/27 crop at 180.1 Mt, driven by a projected 1.2% increase in planted area.

The central mechanism driving the long-term optimism for the sector is the sustained growth in domestic processing, which is forecast to reach a record 62.5 Mt in 2026/2027, up 2.4% year-over-year, according to the USDA FAS. This increase is primarily attributed to rising demand from the nation’s biodiesel industry, which relies on soybean oil for over 75% of its production. While the government’s push for a higher mandatory blend is the structural catalyst—with projections based on the eventual implementation of a B16 (16%) or higher biodiesel blend—investors must factor in the material risk of policy delays. The mandatory increase to B16, originally scheduled for March 2026, has been repeatedly postponed due to the necessary completion of technical feasibility tests, creating uncertainty around the short-term pace of crush capacity expansion.

Despite the biodiesel policy's stop-start implementation, the comfortable supply outlook from the latest harvest suggests continued competitiveness in global markets. The record harvest has created an abundance of supply, a factor that is expected to pressure export premiums, particularly in the first half of 2027 as new crop beans hit the market. In the current market, institutional positioning remains heavily skewed to the long side, with Commitment of Traders (COT) data showing long positions at 182,923 contracts versus 69,063 short contracts for soybeans, reflecting a structural bullish sentiment despite short-term price pressure. Current weather patterns in key growing regions, such as Luís Eduardo Magalhães-BA and Rio Verde-GO, show no recent rainfall (0.0mm in the last seven days), signaling the off-season context after the primary harvest cycle, while Cascavel-PR recorded 10.6mm in the same period, consistent with the usual climate diversity across the vast production area.

For investors following the SOJA/BRL complex and Brazilian equity markets (IBOV), the focus now shifts to two key data points. First is the final regulatory decision from the National Energy Policy Council (CNPE) on the B16 biodiesel mandate timeline, which will dictate the immediate investment pace for processors. Second, market players will closely watch the development of the 2026/2027 crop, with planting scheduled to begin in mid-September. Any deviation from the projected 180.1 Mt production, particularly due to early weather risks like the potential for an El Niño phenomenon, would immediately tighten the balance sheet and bolster both domestic and export prices.