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USDA Oilseed: World Markets and Trade

12 October 2015

USDA Oilseed: World Markets and Trade - 12 October 2015USDA Oilseed: World Markets and Trade - 12 October 2015

USDA Oilseed: World Markets and Trade

Weak Real to Boost Brazil’s Soybean Exports in 2016

Brazil’s exchange rate is having a significant impact on domestic and global soybean production and trade. Since early October 2014, the value of the real has declined 37 percent relative to the dollar. The current exchange rate, at roughly 4 reals per dollar, means that Brazilian producers are operating under a different set of price signals than their counterparts in the United States. While U.S. producers have seen the dollar value of soybeans decline 8 percent since last October, Brazilian producers have seen the price in reals rise to near record levels, equivalent to the nearly $15/bu U.S. producers experienced in May 2014.

The strong soybean price in reals has allowed Brazilian exporters to be more flexible on prices. In addition, this attractive price will encourage further acreage expansion and increased soybean production. In 2016, Brazil’s production is forecast to grow nearly 4 million tons over the previous year, while exports are forecast to expand by a similar amount. With limited import growth expected for China, these sales are expected to occur at the expense of U.S. suppliers. U.S. exports are currently forecast at 45.6 million tons in 2015/16, down 4.6 million tons from last season.

Read the full report here.


Published by USDA Foreign Agricultural Service

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