If Brazil does indeed wind up harvesting a record crop of soybeans, the next six months could be interesting for the US soybean industry given Brazil’s currency, the real, is still testing its major (long-term) low of 0.16756 (May 2020). All while the US dollar index is showing signs of its recently established major uptrend gaining momentum. Recall the much ballyhooed Phase 1 trade deal from January 2020 included the provision that market factors would continue to direct where China bought its commodity supplies from, leading to the world’s largest buyer draining its major supplier (Brazil) of available supplies through August 2020. As I mentioned in my latest Weekly Column, the US soybean industry’s Achilles’ heel is Chinese demand switching back to the Southern Hemisphere, though the US is still looking at a tight supply and demand situation regardless.
