Paraguay’s Record Soybean Crop Gives Way to a More Balanced 2026/27 Market

Paraguay’s record 2025/26 soybean crop is easing global supply concerns, but a forecast return to trend yields and softer Argentine demand in 2026/27 point to a more balanced, mildly supportive price environment rather than a new glut.

The soybean complex enters mid‑April with robust South American supply but rising medium‑term uncertainty. Paraguay’s exceptional 2025/26 campaign, driven by near‑ideal weather, has temporarily boosted export availability into Argentina and Brazil. For 2026/27, production is projected to normalize, while El Niño risk, high Paraguayan input costs and evolving trade policy (notably EUDR) could tighten margins across the chain. Futures have been firming modestly in recent sessions, helped by technical buying and stable soy product demand, while FOB cash indications in key origins show only limited week‑on‑week movement. Market participants should focus on Paraguay’s zafriña harvest progress through July and ENSO developments ahead of the August planting window.

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📈 Prices & Futures

CBOT soybean futures have traded slightly higher this week, with nearby contracts supported by technical buying and steady product demand; national average U.S. cash prices have ticked up by roughly EUR 0.01–0.02/kg equivalent over the past week.

FOB physical indications from the product list show modest firmness in Asian origins: conventional yellow soybeans FOB Beijing are around EUR 0.72/kg, organic soybeans about EUR 0.80/kg, and Indian sortex‑clean soybeans steady near EUR 1.00/kg. Ukrainian FOB Odesa values eased slightly to about EUR 0.34/kg, while U.S. No. 2 FOB Gulf equivalent remains broadly stable near EUR 0.60/kg, reflecting comfortable global supply but no aggressive selling pressure.

Origin	Type	Term	Price (EUR/kg)	WoW Change (EUR/kg)
China (Beijing)	Yellow	FOB	0.72	+0.02
China (Beijing)	Yellow, organic	FOB	0.80	+0.01
U.S. (No. 2)	Standard	FOB	0.60	≈0.00
India (New Delhi)	Sortex clean	FOB	1.00	≈0.00
Ukraine (Odesa)	Standard	FOB	0.34	-0.01

🌍 Supply & Demand: Paraguay in Focus

Paraguay’s soybean production is estimated at a record 12.1 million metric tons in 2025/26, driven by consistent rainfall and strong sunshine, with zafra yields around 3.8 t/ha and top fields achieving up to 6 t/ha. The smaller zafriña crop adds roughly 10% to output, with 2025/26 yields near 1.8 t/ha, still above historical norms.

For 2026/27, production is forecast to fall back to 11.1 million tons as yields normalize to about 3.5 t/ha on the main 3.05 million‑hectare zafra, and total planted area edges slightly lower to 3.5 million hectares amid frontier saturation. Exports are expected to drop from 8.3 to 7.3 million tons as the one‑off Argentine demand surge of 2025/26 fades, while crush eases to 3.6 million tons on softer margins and normalized Argentine sourcing patterns.

Argentina will remain the dominant buyer, typically absorbing 75–85% of Paraguay’s bean exports, but volumes should revert closer to structural norms. Brazil, which takes about 15% for cross‑border crushing, could gain share once the new Paraná River bridge becomes fully operational during 2026/27, improving logistics into poultry‑intensive border states. Direct EU imports of Paraguayan whole beans remain constrained by crop protection rules, but soymeal and oil flows continue, with the EU as top soymeal destination and Chile and Argentina following.

📊 Fundamentals, Costs & Policy

Paraguayan production costs are projected above USD 600/ha in 2026/27, reflecting higher seed, fertilizer, crop protection and operational expenses, plus recurring calcium applications needed on acidic soils. This cost structure leaves small and medium growers highly exposed to any renewed weakening in global soybean prices, with balance sheets already burdened by debt from recent volatility.

The EU Deforestation Regulation (EUDR) represents a medium‑term risk but also a differentiation opportunity. Paraguay is developing a national compliance framework and is viewed as relatively well positioned to supply EUDR‑compliant soybeans and products, helping preserve EU demand for soymeal and oil even as some competing origins face greater scrutiny. Over 6–12 months, structural limits on area expansion in the eastern frontier mean that output growth must come mainly from yield gains and value‑added processing, including a new Chaco crush plant that lifts nominal capacity to about 4.7 million tons per year, though power constraints may slow its ramp‑up.

Downstream, Paraguay’s pork sector is emerging as a notable soymeal demand driver. New Taiwanese market access secured in 2025 is catalyzing European investment in hog production and processing in southern Paraguay, which should gradually raise domestic meal use and slightly reduce exportable surplus. For European buyers, Paraguay’s soymeal export program warrants close watching as EUDR implementation and Argentine demand swings could tighten regional availability and basis levels.

🌦 Weather & El Niño Risk

The main near‑term weather focus is completion of the 2025/26 zafriña harvest through July and the evolution of ENSO conditions into the 2026/27 planting window. Historically, El Niño episodes have brought less favorable January rainfall to Paraguay, undermining zafra yield potential and reducing the economic attractiveness of zafriña planting.

Current international climate guidance leans toward ENSO‑neutral conditions through March–May 2026, with only a modest probability of El Niño formation, but forecast confidence is limited around the boreal spring predictability barrier. If El Niño signals strengthen later in 2026, yield assumptions for the zafra (sown from August onward) may require further downward revision, which would be price‑supportive given Paraguay’s importance as a reliable regional supplier.

📆 Market Watchpoints & 3‑Day Outlook

Key 30–90‑day watchpoints include: (1) final zafriña yields and any late‑season weather stress; (2) confirmation of ENSO trajectory ahead of 2026/27 planting; and (3) the timing of full commercial opening of the new Paraguay–Brazil bridge, which could quickly re‑route part of the export flow. On the demand side, soy product balances remain the primary price anchor, with soymeal notably firm relative to beans.

🧭 Trading Outlook (next 1–3 months)

• Producers in Paraguay and the region: Use current post‑harvest strength to layer in hedges for 2026/27, given high input costs and the likelihood of only trend‑line yields.
• Crushers and feeders: Consider extending coverage into Q4 2026 while Paraguay’s export pipeline is still well supplied, but retain flexibility in case El Niño risk intensifies.
• EU soymeal buyers: Diversify origin mix and monitor Paraguay’s EUDR readiness and Argentine import demand, as both could quickly tighten available meal volumes and basis.

📍 Short‑Term Price Direction (3 days)

• CBOT soybeans: Slightly upward to sideways bias, with technical support and firm soymeal offset by ample South American supply.
• FOB China & India: Mostly stable with a mild firm tone, reflecting steady Asian demand and limited seller pressure.
• FOB Black Sea & U.S. Gulf: Largely range‑bound as logistics and geopolitical risk are already priced in and no major fresh catalysts are visible.

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