Rising South American Supplies, Weak Demand Drag Global Oilseed Prices Into Early 2026

Global oilseed markets came under sustained pressure toward the close of 2025 and in the opening weeks of 2026, as expectations of abundant supplies from South America coincided with mounting concerns over weak global demand. Favorable weather in Brazil and easing sentiment across soy and vegetable oil markets combined to pull prices lower across major exporting origins.

In its Grain Market Report released on January 15, the International Grains Council (IGC) noted a sharp fall in average global soybean export quotations since late November, with the steepest declines recorded at Southern Hemisphere origins. The downturn reflected both improved harvest prospects and a fragile demand environment.

According to the IGC, Chicago soybean spot futures retreated significantly as bearish fundamentals continued to dominate market sentiment. While recent export sales to China offered temporary support, worries about medium-term demand persisted. At the start of 2026, cumulative soybean export commitments were running nearly 30% below last year’s levels, largely due to reduced buying by Chinese processors.

Crop conditions in Brazil further weighed on prices. Mostly favorable weather supported early harvesting that began in December, reinforcing expectations of a large crop. Weakness in soya meal and soya oil markets added to the overall negative tone, even as basis levels in some regions showed marginal improvement.

Despite stronger basis, US Gulf soybean export values declined by about 6% over the period to $425 per ton free on board (fob). Brazilian spot prices fell even more sharply—by roughly 10% since mid-November—to around $405 per ton fob, as markets increasingly priced in a record harvest and lower premiums for new-crop supplies. Argentine up-river export values also dropped close to 10%, settling near $400 per ton fob.

Other oilseeds followed a similar trend. In Canada, ICE canola futures eased by 3%, reflecting expectations of ample supplies and spillover weakness from soybeans. Physical canola prices at Vancouver slipped by $10 to $479 per ton fob, while Australian export offers from Kwinana declined by $20 to $520 per ton fob.

Supporting this broader picture, the UN Food and Agriculture Organization (FAO) reported a 0.2% month-on-month fall in global vegetable oil prices in December, pushing the index to a six-month low. Declines in soy, rapeseed and sunflower oil prices outweighed firmer palm oil values, although for 2025 as a whole, vegetable oil prices remained 17% higher year-on-year due to earlier supply tightness.

Meanwhile, the US Department of Agriculture raised its global soybean production forecast for 2025–26 to a record 425.7 million tons, driven primarily by higher output expectations in Brazil and the United States. Brazil’s crop alone was revised up to 178 million tons, underpinned by expanded acreage, improved yields and favorable rainfall across key producing regions.