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Paraguay’s Rising Role in the Global Soy Market

Few countries have transformed their agricultural profile as rapidly as Paraguay over the past two decades. Today, Paraguay ranks among the world’s top five soybean exporters, alongside giants such as Brazil, the United States, and Argentina. With approximately 3.5 million hectares under soy cultivation, soybeans account for roughly 40% of the country’s export revenues, making the crop the single most important driver of foreign exchange and rural economic activity. For international investors evaluating agricultural land or agribusiness opportunities in South America, Paraguay consistently offers a compelling combination of productive land, competitive input costs, and improving logistics infrastructure — and the 2025/26 season has made that case stronger than ever.

A Historic Growing Season

The 2025/26 soybean harvest in Paraguay’s Eastern Region — which accounts for approximately 97% of national production — has been completed across 100% of the planted area, and the results are historic. What began as a season clouded by concerns over warmer, drier-than-average weather conditions ultimately delivered Paraguay’s largest main-crop soybean harvest on record.

Early-season anxiety proved unfounded. While rainfall was irregular, precipitation arrived at the critical crop development windows — flowering and pod-fill — limiting the impact of heat stress. Crucially, by the time the most adverse conditions materialised, the majority of crops were already in advanced growth stages, providing natural resilience. The result was not only the preservation of yield potential but, in several key growing regions, a significant upward surprise.

Regional Performance and Production Estimates

The most notable yield improvements were concentrated in the northern corridor of Alto Paraná — from Ciudad del Este northward — and in Canindeyú, two regions that had faced the greatest weather uncertainty. Strong performance was equally widespread across Itapúa, Caaguazú, Guairá, Caazapá, San Pedro, Amambay, and Concepción. Misiones and Paraguarí required no upward revision, as these areas had already been tracking above baseline productivity levels.

Based on a March estimate of 10.4 million tons, the April update raises the main harvest figure to 10.9 million tons. The second soybean crop — currently in a stable development phase, with harvest expected between late April and mid-May — could add an estimated 1.4 million tons to the national total. If realised, Paraguay’s combined soy production would reach 12.29 million tons, a figure that would shatter all previous national records and further solidify the country’s position in global soy trade flows.

Market Dynamics: Basis, Pricing, and Chinese Demand

The record harvest is unfolding amid notable price volatility, which investors in agricultural commodities should monitor closely. In recent weeks, the Asunción basis price — the differential between local flat prices and Chicago futures — swung sharply, moving from approximately USD -45/ton to a low of USD -80/ton, before partially recovering to around USD -55/ton.

This compression was driven primarily by a rally in Chicago futures, not a collapse in local flat prices. Two forces propelled that rally: signals of renewed Chinese soybean demand following geopolitical announcements, and rising crude oil prices linked to Middle East tensions, which lifted biofuel margins and, by extension, soy oil and meal complex values. For local farmers, this dynamic — rising global benchmarks outpacing flat local prices — temporarily widened the basis, a seasonal pattern common during peak harvest supply periods when domestic logistics and storage constraints put downward pressure.

Importantly for investors, this basis volatility reflects market liquidity and active commercial participation, not structural weakness. Strong trading volumes and high seasonal grain availability are characteristic of a market functioning efficiently at scale.

Sales Progress: Producers Moving Quickly

Commercial execution by Paraguayan producers this season has been notably aggressive, reflecting both confidence in the crop and sound financial management in a high-supply environment. As of the latest reporting period, 68% of the 2025/26 soybean crop has been sold forward — well above the 48% recorded the prior month and comfortably ahead of the historical average of 63%. This accelerated sales pace signals that producers are locking in favourable prices proactively rather than holding inventory speculatively, which reduces price risk across the supply chain.

Corn is tracking similarly: the 2025 crop is 97% sold, in line with recent-year averages. Second-crop corn advance sales for 2026 stand at 22%, ahead of both last month’s 14% and the historical average of 17%, confirming a broadly more active commercial strategy across the sector this cycle.

Second Crop and Calendar Considerations

Second-crop soybeans are currently competing for acreage with second-crop corn, the latter of which faces a delayed harvest timeline — primarily in the south-central corridor spanning Caaguazú through Ciudad del Este to Naranjal — due to out-of-window planting. Corn harvest is not expected to reach meaningful volumes until mid-July, removing any June supply overhang for that commodity.

Second-crop soybeans, by contrast, are on a more predictable timeline aligned with the Argentine calendar, with harvest expected between late April and mid-May. Productivity forecasts for this second cycle remain preliminary, and any adjustments will be incorporated as maturation progresses.

Investment Implications

For investors with exposure to Paraguayan agricultural land, grain trading, or agribusiness infrastructure, this season delivers multiple positive signals:

• Record production validates land productivity across nearly all major growing departments, supporting farmland valuations
• Accelerated forward sales reduce counterparty and price risk for trading and logistics operators
• Stable flat prices amid basis volatility suggest underlying demand fundamentals remain intact
• Improving second-crop outlook could push total national output past 12 million tons, a psychological and commercial milestone for Paraguay’s grain export sector
• Chinese demand signals and biofuel market tailwinds provide medium-term price support in global soy markets, where Paraguay is an increasingly significant supplier

Paraguay’s agricultural sector continues its trajectory from regional exporter to global-tier producer — and the 2025/26 season may well be remembered as the year that trajectory became undeniable.

GTSA-SA

Founded in 2004, GTSA began as a single office in Buenos Aires. Since then, it has grown into a vibrant regional network, providing professional real estate marketing services to clients in AR, BR, CL, PY, PE, and UY.