Paraguay’s record crush shifts value to soy products as flat beans drift lower

Paraguay’s soybean processing has surged to its strongest first-half level in eight years, tightening regional bean availability but boosting export flows of oil and meal. At the same time, flat-to-softer international soybean prices and recent weakness in soybean oil futures temper the bullish impulse. Soybean crushers in Paraguay are running near record utilisation on the back of attractive oil prices and robust demand for value-added exports. This shift from raw bean exports to processed products is reshaping regional trade flows and keeping meal and oil available for feed, food and biofuel markets, even as whole-bean prices ease. Globally, CBOT soybeans remain under mild pressure, while South American weather and El Niño-related risks are being watched closely for the 2026/27 cycle.

Prices

• FOB soybean indications show a mild downward trend in late August, with Chinese, Ukrainian and US origin beans all easing slightly in EUR terms over recent weeks.
• Benchmark CBOT soybean futures are trading close to key technical support levels around the equivalent of EUR 365–375/t, reflecting comfortable near-term supplies and macro headwinds.
• By contrast, soybean oil prices have been comparatively firm through the first half of 2026, underpinning crushing margins in Paraguay and Argentina, although US futures have corrected by about 7% since 20 August on biofuel policy uncertainty.

Note: USD offers converted to EUR at ~1.16 EUR/USD; values indicative only.

Supply & Demand

• Paraguay crushed 1.85m t of soybeans in January–June 2026, up 12% year on year and the highest first-half volume since 2018, lifting capacity utilisation to 78% by end-June.
• Exports of soybean oil, meal and hulls earned Paraguay about EUR 655m in H1 2026, up 21% year on year, as higher oil prices amplified the value of only modestly larger volumes.
• Strong crush in Paraguay and Argentina adds product supply into global markets, helping keep soybean meal relatively well supplied even as some origins see weather-related uncertainty.
• Favourable margins are incentivising origin crushers to retain beans domestically rather than exporting raw soybeans, slightly tightening the pool of exportable whole-bean supplies from the Plate region.

Fundamentals & Margins

• Paraguayan crushers are benefitting from improved oil realisations: soybean oil export revenues rose 22% year on year in H1 2026 on only a 4% increase in volume, underlining stronger unit prices.
• Higher domestic processing is supporting downstream sectors – animal feed, food processing and biodiesel – via greater availability of meal, hulls and oil, while capturing more value in-country.
• Globally, elevated crush in South America, supported by earlier advances in soybean oil prices, has helped cap soybean meal prices, with ample export flows particularly from Argentina.
• Recent weakness in US soybean oil futures trims some of the margin cushion, but Paraguayan plants still expect to maintain a strong pace of crush into the second half of 2026, conditional on bean availability and river logistics.

Weather & Regional Outlook

• For late August, forecasts point to above-average rainfall over parts of central and south-eastern Brazil, eastern Bolivia and eastern Paraguay, alongside cooler spells in Argentina – broadly supportive for soil moisture ahead of 2026/27 plantings.
• However, an emerging El Niño increases the risk of drier conditions in central and northern Brazil during the next crop cycle, a key watchpoint for global soybean supply and price volatility.

Trading outlook (next 2–4 weeks)

• Crushers / refiners: Current bean price softness alongside still-favourable product values argues for maintaining high crush rates where logistics allow, but monitor soybean oil’s recent pullback for potential margin compression.
• Feed buyers: Elevated South American crush points to continued availability of meal; consider scaling in coverage on price dips, with some weather and El Niño risk premium likely to rebuild later in Q4.
• Producers / sellers: Paraguay’s shift towards processed exports may support local basis levels; consider hedging part of 2026/27 production on CBOT if futures rally back above recent resistance zones.

3-day directional price indication (EUR)

• CBOT soybeans (nearby, EUR basis): Slightly bearish to sideways – pressured by comfortable short-term supplies, but supported near key technical floors.
• South American FOB beans: Mostly steady with a mild softening bias as crushers favour domestic processing and export demand focuses on meal and oil.
• Soybean oil / meal: Oil modestly softer after recent futures correction; meal stable to slightly firm on strong feed demand.