Wheat planting advances, but sector highlights uncertainties with quality and climate
The planting of the new Brazilian wheat crop reached 41.1% of the planned area, according to monitoring by Conab (National Supply Company, at a time when producers and agents in the chain are following with concern the reduction in cultivated area, the high production costs and the possible climate impacts associated with El Niño.
According to Conab, crops already established are showing satisfactory development in states such as Paraná, Rio Grande do Sul, Santa Catarina and Mato Grosso do Sul. In Paraná, lower temperatures and recent rains favored the establishment of sown areas, while in Rio Grande do Sul planting is progressing at an initial pace, with good conditions for emerging crops.
However, the scenario for the new season is marked by caution. According to Nelson Montagna, wheat supply manager at Moinho Anaconda, the cereal is particularly sensitive to weather conditions.
"Wheat in general is a grain that is especially sensitive to the climate. With a mega El Niño expected, we see a very risky situation here for the southern hemisphere", he stated. In addition to climate uncertainties, Montagna highlighted that planting intentions are lower in important producing states, highlighting Paraná.
Lower technological investment
Farsul (Rio Grande do Sul State Agriculture Federation) observes a trend towards partial replacement of wheat with other winter crops, such as canola, in addition to the adoption of alternative production systems. There are also signs of a reduction in the technological level used in crops, with greater use of own seeds and less demand for certified seeds.
Montagna adds that the increase in production costs has put pressure on farmers' profitability. "The other concern that arises is the cost of planting, fertilizers, pesticides. And prices have stabilized at a level that producers do not consider very positive."
There is also concern that, given the increase in production costs, producers will not make the necessary investments in the harvest. "With producers under high cost pressure and low [commodity] prices, they will plant almost out of obligation, without the expected treatment," said Montagna.
Thus, there is an expectation that there will be a worsening in the quality of wheat produced nationally, and a dependence on imports of wheat with a higher concentration of protein, used for the manufacture of flour for baking and fresh pasta.
Lower production and dependence on imports
Despite the favorable conditions observed in most producing regions so far, the sector is working with projections of a smaller harvest in 2026/27.
For Brazil, the USDA projects production of 6.7 million tons and imports of 7.2 million tons of wheat. Safras & Mercado estimates 6.16 million tons of Brazilian production, citing lower planting intentions and producers' reduced margins.
TF Consultoria Agroeconomic works with similar estimates, of production close to 6.5 million tons and imports of 6.75 million tons.
"With the likely large reduction in production, by area and less use of technology, imports should increase and, as a consequence, level domestic prices with international parity", said analyst Luiz Pacheco, from TF Consultoria Agroeconomia.
With market estimates between 6.1 million and 6.7 million tons, the volume will be insufficient to meet domestic demand, estimated at around 13 million tons.
Wheat milling exceeds 13 million tons in Brazil | CNN AGRO NEWS
Argentina remains the main supplier of cereal to Brazilian mills, but quality problems observed in the Argentine crop harvested in 2025 have led part of the sector to look for alternatives.
According to Montagna, the quality of Argentine wheat was below the expectations of the milling industry. "Last year's harvest was far below quality expectations in Argentina. There was a bit of leaching. Productivity was much higher, but there was a lack of 'food' for the grain, especially in terms of protein content", he stated.
Although there is the possibility of diversifying origins, the logistical cost limits this strategy. "Shipping is prohibitive. The first option would have been American wheat, but it is very expensive. There are people testing Russian wheat. In the South region they tried more Uruguayan and Paraguayan wheat", he said.
Domestic market faces tight margins
While production and import costs increase, mills report difficulty passing on increases to the end consumer.
Montagna states that the sector operates with reduced margins and a price-sensitive market. "It's going to be a year of tight margins. [Consumer] purchasing power is lower, and the market is very sensitive."
According to Pacheco, the strong competition in the segment makes price increases difficult. "We received a lot of news about mills reducing the price of flour or maintaining the previous month's price, which prevents the transfer of this month's shipping and packaging costs and makes it difficult to increase grain prices."
Offers of nationalized Argentine wheat in Brazilian ports are around US$295 per ton, reflecting the appreciation observed in both sea freight and FOB prices at Argentine origin in recent months.
Unfavorable commercial window
In addition to internal challenges, the sector highlights a structural characteristic of the Brazilian market that limits the cereal's potential for appreciation.
According to Montagna, the national harvest calendar coincides with the entry period of the Northern Hemisphere harvest, when large volumes reach the international market.
"Brazil has a very particular crop situation that is unfavorable. Ninety percent of the world's wheat is harvested from July onwards. When we go to harvest, the world harvest is coming in, and this puts downward pressure on the price", he explained.
The executive notes that the marketing window is also narrow, especially for producers in Rio Grande do Sul, whose harvest occurs later and coincides with the arrival of the Argentine harvest on the market.
Source: CNN