Feed report: Sliding real presents export opportunities for Brazil
The value of the Brazilian real (R$) has tumbled in recent weeks.
On 21 May, the real was worth R$1=$0.269, its weakest level since March 2016. The weakness of the real relative to the US dollar makes Brazilian products, such as soyabeans, more attractive in the export market. Currently, the cost of exports of Brazilian soya to China are reportedly $15-20 per tonne under shipments of those from a US origin.
The USDA has forecast Brazil to export a record of 73.3 million tonnes of soyabean this season (2017/18). Furthermore, the news agency Reuters reports that the exports of Brazilian soyabeans could continue beyond their normal marketing period, drifting into the US selling season.
The prospect of Brazilian supplies encroaching on the beginning of the US 2018/19 soya export season could well pressure US oilseed prices. This in turn may feed through into global oilseeds markets given that US prices are viewed as a global benchmark, including for the domestic prices for soyabean/meal.
Felicity Rusk and Zoe Avison, Trainee Analysts