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Political unrest in Brazil could impact grain trade
An analyst says political unrest in Brazil has helped spark a rally in soybean prices.
Arlan Suderman with I-N-T-L FC Stone tells Brownfield the Brazilian real has reached eight month highs on hopes that a presidential impeachment could strengthen that country’s economy.
“That’s probably not likely; I think they’re thinking that because when they previously had an impeachment move (I believe) in 1992, the new leadership was able to quickly put in some reform policies that really jump-started their economy.”
The U.S. has been losing market-share to Brazil partly because of a currency disparity, but Suderman says that is starting to change.
“When the Brazilian real has strengthened, that has tended to strengthen U.S. soybean prices as it has narrowed the gap.”
There will be a vote Sunday on whether to impeach Brazilian president Dilma Rousseff, and Suderman says the market will be watching that outcome closely.
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