Soybeans Fall 15¼ Cents to Two-Month Low After Lula Wins in Brazil
Key Facts
U.S. November soybean futures fell 15¼ cents and hit a two-month low in overnight trading as of 6 a.m. Chicago time on October 26, according to a Pro Farmer report. The move followed the re-election of Luiz Inácio Lula da Silva as Brazil’s president in the October 25 runoff. Lula’s win was expected to send the Brazilian real sharply lower, the report said, describing the currency’s impact as a bearish tone for U.S. grain and soybean futures. Meanwhile, Reuters coverage showed November Brazilian real futures falling 10% in Asian trading, placing the result in the context of a broader market reaction. Pro Farmer did not link the move to a confirmed cause beyond the currency’s effect on sentiment.
The decline extended to soybean-related products: December soybean meal futures fell $6, and soybean oil futures for the same month dropped 31 points, according to Pro Farmer. December corn futures fell 3 cents, while December soft red winter wheat rose half a cent and hard red winter wheat fell 1 cent. The moves reflected a mixed agricultural session, with soybeans and their products and corn lower, while one of the two wheat contracts posted a slight gain. The report listed these prices in its market check on the morning of October 26, alongside trading after the Brazilian election result. The Nomura NF Ibovespa-linked exchange-traded fund in Tokyo also fell 15% on October 26, Reuters reported, in a parallel move in Brazilian assets.
The election result was close: Lula received 51.8% of the vote and led his rival, Flavio Bolsonaro, by about 4.4 million votes, with 100% of the votes counted, according to results reported by the Associated Press. Brazilian assets had reflected bets on a rightward political shift ahead of the runoff: stocks closed on Friday, October 23, about 7% above their level before the first round, and the real was about 5% stronger against the dollar, according to Reuters via Marketscreener. After Lula’s victory was announced, an analyst at Warren Investimentos said the market could see a sharp repricing and asset selling, and that the reaction during the week was likely to be volatile. The analyst said: "We expect a sharp market reaction on Monday, with a strong repricing and asset selling, and interest-rate futures could hit their upper limit shortly after the open."
On demand for U.S. soybeans, the U.S. Department of Agriculture announced private sales of 202,000 metric tons to China on October 22, for delivery during the 2026/2027 marketing year. Those followed sales announced by exporters on October 19, including 114,000 metric tons to China and 261,000 metric tons to unknown destinations, for delivery during the same season. The announcements put Chinese purchases in the market backdrop as U.S. November futures declined, and show that new sales to China continued to be announced during October. The zsusx soybean futures index closed at 1,268.75 on October 19, then at 1,247.5 on October 25, according to EL7 data. The two closes show a decline between those dates, while the November contract hit a two-month low in overnight trading on the morning of October 26.
The USDA’s next weekly export sales report is due on October 29 at 8:30 a.m. Eastern time. The release follows private sales announcements to China and unknown destinations on October 19 and 22, and will provide an update on weekly export sales. Until its release, the private sales figures announced during October remain part of the backdrop for U.S. soybean futures trading. Pro Farmer’s report records the November contract’s decline in its morning price check on October 26, alongside the reaction to Lula’s win. In Brazil, Lula said after the result was announced that he would govern for all Brazilians, adding: "I have to govern for 215 million... and I have to govern for all cities," according to Reuters.