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luisvieira
Senior Contributor

Possible impeachment in Brazil affects soybean market

Hello guys,

 

The Brazilian House of Representatives is set to vote an impeachment request at the its floor by April 17. In the meantime, Brazilian farmers watch that cautiously and they await for that to sell more volumes of soybeans. Why is that? The dollar value in Brazilian currency may go higher if the impeachment is refused and lower if president Dilma Roussef goes home. In other words, if Dilma is out the dollar will be closer to R$ 3, if she stays in office the dollar will be closer to R$ 4, benefiting soybean exports and others. So in this scenario of uncertainty, farmers are waiting to see what happens.

 

What do you think?

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5 Replies
marketeye
Veteran Advisor

Re: Possible impeachment in Brazil affects soybean market

Luis,

 

Simply put. An impeachment would not favor prices for Brazilian farmers? Maybe that's why I saw her in a photo, yesterday, riding in the cab of a combine cutting soybeans? Is she trying to build up her image with farmers, a group that she believes may be on her side? Just a thought.

 

Also, thanks for posting this perspective. It could serve as a version of a "Black Swan" event for the soybean market, this year. Hey, what percentage of this year's Brazilian soybean crop has been harvested? Is it nearing 80%?

 

Mike

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Re: Possible impeachment in Brazil affects soybean market

Hi Luis,

 

Well, despite whatever temporary disincetives ARG or BRA circumstances might present, there are a lot of soybeans.

 

Oils not so much but if oil starts driving crush we're going to have a lot of meal so that caps any rally until something else happens.

 

My wild guess is that slow planting in the south and price action since the report have already moved a million or more acres over from C to S here.

 

Question for US north plains and CA farmers- maybe I should move it to the top. Is the relative strength of oil going to prompt some switching to minor oilseeds?

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luisvieira
Senior Contributor

Re: Possible impeachment in Brazil affects soybean market

As most of the soybeans are directed for exports, at a short-term perspective there will be more confidence at the economy if Dilma Roussef is out and, therefore, a stronger currency with lower exports. Farmers have never been a big source of support for the imcunbent party, the Workers Party, because is not a pro-business party and some relationship with some anti-property righs associations, though it caught some support from subsistence farms and a few corporate farms. (My personal opinion is that this government united the very rich and the very poor in general). In fact, today the Confederation of Agriculture and Livestock of Brazil issue a statement that the debacle of the Brazilian economy sooner or later is going to impact significantly agriculture and the institutions should resolve the economic, institutional and political crisis, while Roussef has appealed for all sides for support to maintain her post.

 

Yes, the harvest is near 80% and under 60% sold. There is some dry weather worries in the Matopiba region (states of Maranhão, Tocantins, Piauí and Bahia) with very reduced yields

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ray h.
Senior Contributor

Re: Possible impeachment in Brazil affects soybean market

     Funny,impeachment talk.We seem to be about ready to elect an impeachment,but nobody seems to give a rats @$$.

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roarintiger1
Honored Advisor

Re: Possible impeachment in Brazil affects soybean market

It really does depend on who wins the election.   Smiley Wink

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