Apr 29, 2020
Domestic Soybean Prices in Brazil Set Records Last Friday
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Domestic soybean prices in Brazil set all-time records last Friday according to the consulting firm Agrinvest Commodities. The accelerated weakening of the Brazilian currency was the principal factor behind the price increase.
At one point last Friday, the price of soybeans at the Port of Paranagua hit R$ 112.50 per sack for August delivery and payment on September 1st (approximately $10 per bushel depending on what exchange rate is used).
At one point last Friday the currency traded at more than 5.7 reals per dollar due to the political chaos at the highest level of the Brazilian government. The Brazilian Attorney General, Sergio Moro, resigned on Friday because of President Jair Bolsonaro's firing of the head of the Federal Police, which is the Brazilian equivalent of the FBI. Several political parties in the Brazilian Congress have already called for the impeachment of President Bolsonaro due to his interference with the Federal Police who are investigating his two sons on corruption charges.
The real had already been weakening for weeks due to the Covid-19 pandemic and the potential impact on the Brazilian economy. The political chaos accelerated the weakening even more. The weakened currency has also intensified the selling pace of the 2019/20 soybean crop and the 2020/21 crop as well.