Soybean market weighs El Niño risk as analyst sees Chicago above $14 in 2027

Market attention turns toward Brazil

The global soybean market is beginning to assess the possible impact of a strong El Niño on South American production, although the risk of a major Brazilian crop failure has not yet been fully incorporated into prices. Canal Rural reported that weather forecasts are moving closer to the center of investors’ decisions as the US harvest advances and the market prepares to focus on the 2026/27 South American season.

Rafael Silveira, an analyst at Safras & Mercado, said the size of the US crop should become clearer as harvesting progresses. Attention will then move increasingly toward Brazil, where rainfall distribution during planting and crop development will help determine whether weather concerns translate into lower production expectations and a larger risk premium in Chicago soybean futures.

Regional conditions point to uneven risks

According to Silveira, El Niño tends to bring high rainfall volumes to southern Brazil. Paraná is expected to receive significant accumulated precipitation in the coming days, while October weather maps still indicate relatively favorable conditions in important areas of the Center-West, including Mato Grosso, Goiás and Mato Grosso do Sul.

The outlook is less comfortable in Matopiba, the agricultural region covering parts of Maranhão, Tocantins, Piauí and Bahia. Silveira highlighted irregular rainfall and the prospect of intense heat waves there, with conditions potentially becoming more challenging from November. The contrast between excessive moisture in the South and unreliable rain in northern producing areas means that a national production problem would depend on the timing, geographic reach and severity of the weather.

November and December are therefore expected to become increasingly important for price formation. December is a decisive period for soybean yield potential in several Brazilian regions. Changes in rainfall projections could trigger market rallies, Silveira said, as traders respond to whether forecast precipitation reaches crops at the required stages of development.

Brazilian losses could shift demand to the US

The price impact would extend beyond Brazil if adverse weather caused a substantial reduction in its 2027 soybean crop. Silveira said buyers could turn more aggressively to US supplies. China would remain central, but other importing countries could also increase purchases of US soybeans. That additional export demand could significantly reduce US stocks and alter the pricing outlook on the Chicago Board of Trade.

Under a more adverse scenario for South American production, Silveira said Chicago soybean prices could rise above $14 a bushel in 2027. This is a conditional forecast rather than a current market outcome: Canal Rural reported that a Brazilian crop failure linked to a strong El Niño is not yet priced in. For Brazilian producers, the coming months will require simultaneous monitoring of Chicago futures, exchange rates and weather models. For importers and processors, confirmation of Brazilian production losses would raise the importance of US supply availability and increase exposure to a tighter global balance.