EU Soybean Crop Slumps 20%: Drought Tightens Non‑GM Supply and Lifts Prices

Europe’s 2026 soybean harvest is set to drop about 20% year-on-year, sharply tightening regional non-GM supply and underpinning firmer prices for beans and meal into 2026/27. Lower EU output and smaller Ukrainian exports mean Europe will lean more heavily on overseas origins, with crushers and feed buyers facing higher replacement costs and basis risk. The latest market assessments indicate the EU will harvest roughly 2.4 million tonnes of soybeans in 2026, down from 2025 as heatwaves and drought cut yields by about 15% versus the five‑year average and acreage retreats in many countries. Italy and Austria suffer double‑digit production losses, partly offset by gains in Poland and Germany, while Ukraine’s crop and exports also weaken. With EU self‑sufficiency in soy slipping toward 6%, import demand for (non‑GM) beans and meal from the Americas is poised to rise, supporting CBOT futures and European physical premiums even as South American planting gets underway under mixed but broadly adequate weather conditions.

Prices

European soybean price indications have firmed on the back of the sharply smaller 2026 EU crop and tighter non‑GM supply. Regional market commentary highlights that lower local availability and higher import costs are pushing quotations upward, particularly in Italy and key non‑GM hubs, with Bologna benchmark prices reported around 10–15% above July levels as of early October.

On the futures side, the November 2026 CBOT soybean contract is trading moderately higher versus a year ago, with recent levels around 1,198.25 US‑cents per bushel and up about 9–10% year‑on‑year. Nearby CBOT soybean futures reference series are also elevated versus early November last year, reflecting both stronger international demand and weather‑ and freight‑related risk premia.

Supply & Demand

For 2026, European soybean production is forecast at roughly 2.4 million tonnes, about 20% below 2025. The main drivers are severe heatwaves and drought that depressed yields and discouraged plantings in many countries. Average EU soybean yields are seen around 2.24 t/ha, about 15% under the five‑year mean.

• Italy: Remains the EU’s largest soybean producer, but 2026 output is projected near 900,000 t, about 15% below 2025.
• Austria: Production is expected to plunge 36% to around 180,000 t.
• Poland: Expands soy output by more than 15% to about 264,000 t, becoming the EU’s third‑largest producer.
• Germany: Records a modest 2.4% increase to around 134,000 t.

Ukraine, a key supplier of non‑GM soybeans to Europe, faces a smaller 2026 crop near 4.4 million tonnes, roughly 10% below the previous year. Export flows are also constrained: September soybean exports were reported at only about 27,000 t, roughly one‑third of last year’s level, reflecting both lower availability and ongoing logistical challenges.

Against this backdrop, Europe’s soybean self‑sufficiency is projected to fall from about 8% in marketing year 2025/26 to roughly 6% in 2026/27, increasing dependency on imported beans and meal. Non‑GM supply is particularly tight, as reduced EU and Ukrainian crops intersect with limited availability from other traditional origins such as India.

Fundamentals & External Drivers

Global fundamentals partly offset Europe’s shortfall. In Argentina, the 2026/27 soybean planting campaign has just started with around 2–5% of area sown and total intended area near 17 million hectares, slightly above last season, supported by adequate soil moisture in much of the core belt.

In Brazil, early‑season weather is mixed but broadly manageable. Forecasts for November–January point to above‑average rainfall in southern Brazil and parts of Argentina and Uruguay, but drier‑than‑normal conditions over northern Brazil and parts of the MATOPIBA region, implying localized yield risk but no clear widespread crop failure signal at this stage.

For Europe, the 2026 soybean shortfall follows a summer marked by record heat and prolonged drought, especially in Western and Central regions. This not only reduced soybean yields but also tightened supplies of other non‑GM feed grains and oilseeds, amplifying competition for protein raw materials in feed rations and supporting crush margins for soymeal relative to alternative proteins.

Logistics and trade dynamics further underpin prices. Lower Ukrainian exports owing to war‑related disruptions, combined with strong internal crushing incentives, reduce the availability of non‑GM beans for EU importers. At the same time, freight and insurance costs on key Black Sea and Atlantic routes remain elevated, raising the landed cost of imported beans into Mediterranean and Northern European ports.

Weather & Crop Outlook

Europe: The 2026 harvest outcome is already largely set, with yield losses locked in by past drought and heat. For the coming cycle, soil moisture recharge over winter and spring will be crucial, but it is too early for firm projections. Any delayed replenishment could again cap yield potential and discourage area expansion, particularly in marginal soy zones.

South America: Seasonal outlooks for November–January suggest wetter‑than‑normal conditions in southern Brazil, eastern Paraguay, Uruguay and parts of Argentina, favouring soy development there, while northern Brazil and parts of MATOPIBA may see rainfall deficits and heat spells. This split pattern increases intra‑regional production risk and could inject additional volatility into CBOT if problems in the north intensify during pod‑filling.

Trading Outlook

• EU crushers & feed buyers: Consider advancing coverage for Q2–Q4 2026 non‑GM needs, given the 20% EU crop loss, tighter Ukrainian availability and only gradually improving South American supply prospects. Basis risk is elevated in Italy, Austria and neighbouring import hubs.
• Producers in Poland & Germany: The relative resilience and modest growth in domestic output provide an opportunity to lock in attractive forward prices, especially for identity‑preserved non‑GM lots, while monitoring new‑crop weather and policy support signals.
• Speculative participants: With EU self‑sufficiency dropping to about 6% and South American weather risk still in play, price dips linked to short‑term macro or currency moves may offer entries on the long side, but exposure should be actively managed around key South American pollination and pod‑fill windows.

3‑Day Directional Outlook (Futures & Regional Focus)

• CBOT soybeans (nearby & Nov‑26): Mildly bullish bias as markets digest the confirmed 20% EU crop decline and ongoing South American weather uncertainty.
• EU physical non‑GM markets (Italy, Central Europe): Firm to slightly higher tone expected, with limited farmer selling and strong feed demand keeping nearby availability tight.
• Black Sea / Ukrainian corridor: Stable to firm basis levels amid constrained export flows and competing internal crush demand.