Climate and costs pressure Mercosur's upcoming agricultural campaign

The agricultural outlook for Mercosur countries in the 2026/27 campaign presents a mixed picture, with projections indicating an expansion in soybean production but a decline in corn and wheat volumes.

These forecasts gain significance amid warnings of a potential El Niño phenomenon, which could affect Latin America during critical stages of the agricultural calendar. A recent report by Bank of America (BofA), cited by Bloomberg, identifies agriculture as a sector with high exposure, highlighting particular risks for Brazil and Argentina. The report suggests that irregular rainfall associated with El Niño could delay soybean planting and shorten the window for second-crop corn, increasing the vulnerability of both crops.

For corn, the combined production of Argentina, Brazil, Paraguay, and Uruguay is estimated to reach 201.1 million tons in 2026/27, a decrease of approximately 4.5% from the 210.6 million tons projected for 2025/26. This reduction is also expected to affect foreign trade, with exports from these four countries projected to fall by 6.3% to 84.8 million tons. Brazil is expected to remain the leading producer with 139.0 million tons, followed by Argentina with 55.0 million.

Soybean production, however, is projected to increase by 2.5% to 250.2 million tons in 2026/27, up from 244.2 million tons in the previous cycle. Brazil is anticipated to account for a large portion of this volume, with a projected harvest of 186.0 million tons, while Argentina is expected to produce 50.0 million tons. Joint exports are forecast to remain high, totaling 134.7 million tons, nearly unchanged from the previous campaign. Brazil will again lead exports with 118.0 million tons, with Paraguay playing a significant role within the bloc.