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Cargoes that are already en route were expected to be redirected to importers from other destinations willing to absorb the volumes.
Market sources also said the conflict is likely to affect meat and bone meal cargoes bound to other countries in the region that may face war-risk surcharges.
For corn, short-term effects are limited, but a negative impact on South American exports is also expected if the conflict persists.
“Iran was said to have canceled several cargoes of South American soymeal purchases and a cargo of soybean this week,” Charlie Sernatinger, analyst at Marex Capital Markets, said in a note to clients on Thursday March 5.
“We’ve heard that some trading firms that had bought soymeal into Iran are trying to wash out,” a market source based in Argentina told Fastmarkets.
“We heard of washouts as it’s cheaper than leaving the cargo afloat,” a market source in Brazil told Fastmarkets. “[These] soymeal [cargoes] will be left over and offered for sale. If it does not find a quick destination for it, it will impact the premiums. If it gets washed out and remains unsold, it is even worse,” the source added.
The effect on general soymeal demand, however, is still a source of uncertainty. Iran is an important soymeal buyer, especially from Brazil, but the country has faced difficulties in obtaining credit to finance imports due to bank restrictions imposed through sanctions by the US.
Iran imported 581,478 tonnes of soymeal from Brazil in 2025, down by 72% from 2.1 million tonnes in 2024. Brazilian soybeans imported by Iran amounted to 1.4 million tonnes in 2025, down by 25.3% from the 1.8 million tonnes Iran purchased in 2024.
The latest data available shows Argentina exported 1 million tonnes of soymeal to Iran in 2025, more than doubling the 463,388 tonnes in the previous year. No soybean exports to Iran appear in the Argentine customs records for 2025 and 2024.
“[There are] a lot of questions on all the vessels waiting to load, en route, waiting to get in and out of Hormuz. The longer the situation goes on, the higher the risk of meal stocks backing up at Paranaguá port and creating big losses for exporters,” Eduardo Vanin, agriculture strategist at Marex, said in a note to clients.
“Iran buys soymeal, but I do not think it will be a lack of demand that will hit the market hard. Many companies already did not sell to Iran,” the Argentina-based source said.
“What hits the market the most is the effect on crude oil. Argentina becomes a very expensive origin now with freight costs rising,” they added.
Brazil-based market sources told Fastmarkets that cargoes bought by Iranian importers that are in line-up at Brazilian ports or already underway are likely to be washed out or redirected to other destinations amid the closing of the Strait of Hormuz and the increasing cost to ship to Iran during the war.
“There are cargoes destined for Iran afloat, which will no longer have a destination,” the Brazil-based source told Fastmarkets.
“The market, which was already offered, will now be even more so,” they added.
Another Argentine-based source told Fastmarkets that the conflict is also bearish for soymeal premiums because of the bullish effect on freight rates and the high probability of washouts.
Freight rates in the Atlantic Ocean market for Panamax-sized vessels rose in the week to Wednesday March 4 to their highest levels since 2024.
On the Brazil-Northeast Asia route, freight rates rose by $5.30 per tonne to $47.80 per tonne, while the US Gulf-Northeast Asia route increased by $4.70 per tonne to $57.70 per tonne.
These were the highest levels assessed by Fastmarkets since August 2024 for the US Gulf and since May 2024 for Brazil.
Freight sources said the spike in these rates was mostly due to the escalation of the conflict between Iran and US-Israel, particularly because of the effect this was having on the price of bunker fuel prices.
Market sources told Fastmarkets that currently only two companies in Brazil originate soymeal to send to Iran, often at a premium to market prices because of the risk that was already associated with the destination before the conflict started.
In February, one of these companies bought soymeal in the FAS Paranaguá market to fill at least one cargo scheduled to start loading in March, which may now face greater difficulty finding alternative destinations due to higher prices.
“They have very expensive soymeal bought, precisely because of the premium Iran pays; I do not know where the product is going to be diverted to,” one market source in the FAS market said.
“They will certainly redirect and resell what is already available at the port,” a second FAS market source said.
Line up data up to March 3 seen by Fastmarkets showed nine cargoes from Brazil bound for Iran. There was one cargo of pellets in the Port of Tubarão expected to sail on April 1. In the port of Santos, one cargo of pellets sailed February 26 and another was expected to sail on March 24. There were also two soybean cargoes, one expected to sail on March 9 and the other on March 24.
In the port of Paranaguá, two cargoes of soybeans sailed on February 19 and 28. In the port of São Francisco do Sul, there was one corn cargo set to sail on March 19. In the Port of Rio Grande, one low protein soymeal cargo sailed on February 2.
The effect of the Iran conflict on soybeans and soymeal is immediate, Brazilian agricultural consultancy AgRural grains and oilseeds analyst Daniele Siqueira told Fastmarkets. But Iran’s share of Brazilian exports of these products is much smaller when compared with corn.
Iran was the main buyer of Brazilian corn in 2025, importing 9.1 million tonnes — a 109% increase from 4.3 million tonnes in 2024, when the country ranked as the third-largest importer.Brazil’s corn exports totaled 40.97 million tonnes in 2025, up by 3% from 39.78 million tonnes in 2024.
“A little more [Brazilian corn] was sent to neighboring countries. We will undoubtedly see a negative impact on exports. It is not a big deal, but it does have an impact,” Siqueira said.
Despite Iran’s position as the main buyer of Brazilian corn in 2025, analysts are skeptical of a significant effect of the conflict between US-Israel and Iran on Brazilian exports in the short term, as the commercial year only gains momentum in July, when safrinha (second corn crop) harvest begins.
“Brazil will only have problems [regarding corn exports] if the war extends into the second half of the year,” Siqueira told Fastmarkets. She added that the impact in the first half of the year is limited due to the smaller volume exported before the second corn crop hits the market.
In January, Iran was Brazil’s main buyer of corn, with 1.2 million tonnes, of a total 4.2 million tonnes exported in the first month of 2026.
The Brazilian Association of Corn and Sorghum Producers (Abramilho) said Brazilian corn is distributed to a wide and diverse range of international markets. “Therefore, Brazil should have no difficulty exporting corn to other countries if Iran is unable to make new purchases of the grain”, the association said, highlighting that Brazil is a strategic source for Iran because it is the origin of 80% of the corn Iran purchases.
Argentina, which started its commercial year for corn in March, has little corn destinated to Iran.
“There are not many Argentine exports to Iran. Last year, the most significant exports were one million tonnes of soymeal, some soybeans and corn, but not in significant quantities,” independent analyst Javier Preciado Patiño told Fastmarkets.
In the Black Sea region, most of the grain vessels that were about to sail to Iran were cancelled and are now looking for new buyers, sources told Fastmarkets.
“The closing of the Hormuz Strait and the bombing of Iran is not good for grain demand. The Russians have already stopped shipping wheat to Iran,” Marex analyst Charlie Sernatinger said in a note to clients.
“Grain to other countries in the Gulf is backing up as well,” he added.
Iran’s wheat imports are currently sourced entirely from Russia, with recent news indicating that the countries have shifted to a government-to-government trade basis.
Russian wheat exports to Iran reached 1.9 million tonnes between July 2024 and March 5, exceeding the 1.3 million tonnes imported during the entire 2024/25 marketing year.
A Brazilian-based market source from the meat and bone meal (MBM) sector told Fastmarkets that at least one cargo receiver has stopped operating in Karachi, Pakistan, following the outbreak of the conflict.
Due to Karachi’s proximity to the Persian Gulf, tensions in the Strait of Hormuz have increased the risk premium and driven up insurance costs, affecting vessel availability in the region, a market participant said.
Pakistan has become a hub for Brazil’s MBM deliveries across the Middle East and Asia in recent months. The country accounted for around 35% of Brazil’s total MBM exports in January, with shipments of 18,361 tonnes.
“A decision has not yet been made regarding all cargoes entering the Persian Gulf. The most likely scenario is that new deliveries will be rerouted to the Red Sea,” the Brazilian-based MBM source said.
Another source told Fastmarkets that MBM receivers in Karachi are only operating if vessel owners are willing to reach the destination, but are applying the war risk surcharge, which is expected to increase freight costs.
There were no reports of disrupted negotiations for Brazilian MBM at the time of publication.
The fertilizer market is likely to be significantly affected by the conflict, according to a report from Itaú BBA. The Middle East accounts for more than 40% of global urea exports, in addition to a significant share of ammonia and phosphate exports, the consultancy said.
In the short term, the effect of the war on Brazilian producers is likely to be mitigated by seasonality because Brazil is not at the peak of nitrogen fertilizer purchases at this time of year.
The country imports around 80% to 85% of the fertilizers it consumes. Approximately one-third of imported urea is sourced directly or indirectly from the Middle East.
“A prolonged escalation of the conflict could compromise planning for the next harvest, raising the cost per hectare and deteriorating terms of trade, especially for nitrogen-intensive crops such as corn and wheat,” Itaú BBA analysts wrote.
According to the consultancy, virtually the entire volume of fertilizer for the 2025/26 safrinha has already been purchased.
For the 2026/27 summer crop, however, Brazilian farmers still need to purchase inputs.
“In this context, producers face the dilemma of whether to anticipate new purchases, given the risk of supply restrictions, or to postpone purchases in anticipation of more favorable price conditions,” Itaú BBA analysts wrote.
Fertilizer purchases for the winter crop are around 30% complete, below the 40% average observed in recent years, according to Itaú BBA data.
Brazil’s Parliamentary Agricultural Front (FPA) said in a note on Thursday the escalation of the conflict puts not only relevant markets at stake, but also strategic maritime transport routes and the global flow of crude oil.
“Logistics costs tend to be affected by route deviations and increased risk perception, with higher insurance premiums in maritime transport and direct impacts on trade. The result is an increase in operating expenses throughout the supply chain,” the FPA said.
The ability to adapt to possible logistical disruptions will be “essential to at least mitigate risks and preserve the competitiveness of Brazil’s thriving agricultural sector,” it added.
Eduardo Tinti, in São Paulo, and Eoin Hughes, in London, contributed to this article
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