Brazilian Real Devalues More Than 10% After Lula's Re-Election, Boosting Agribusiness
Cubierto por 3 fuentesPublicado
- bichos del campoLa victoria de Lula en Brasil generó una mejora enorme de la competitividad agroindustrial (los productores de trigo, agradecidos)
- mas cointainerLula de Silva wins in Brazil: the economic and trade keys for Latin America
- Hellenics Shipping newsSoybean futures dip as Brazilian real slides following Lula election win
- bichos del campo“Avalancha” bajista para la soja luego de la sùper devaluación brasileña promovida por la victoria de Lula
The Brazilian real devalued more than 10% this Monday compared to the previous Friday's close, reaching 5.57 R$/u$s, its highest level since mid-2025, in reaction to the re-election of President Luiz Inácio Lula da Silva. The currency depreciation represents relief for Brazilian wheat producers, who were facing a harvest marked by production shortfalls and quality issues in several regions of the south of the country, and it also improves the competitive profile of agribusiness exports by increasing the amount of reais received for each dollar generated.
Election Result
Lula, 80, was re-elected to his fourth term for the Workers' Party. According to data cited by bichos del campo, he obtained 64,256,232 votes (51.79%) against 59,826,041 votes (48.21%) for his rival Flávio Bolsonaro, of the Liberal Party. Another source, based on results from the Brazilian Electoral Court and Reuters reports, recorded slightly different percentages: 51.75% for Lula versus 48.25% for Bolsonaro.
Impact on Grain Markets
The weakening of the real had an immediate impact in Chicago: CBOT soybean futures fell 1.2% in Asian trading on October 26, to 12.535 dollars per bushel, while the real traded at 18 cents on the Chicago Mercantile Exchange, 10.3% below the October 23 close. Traders consulted by Hellenic Shipping News noted that a weaker currency allows Brazilian soybean exporters —the world's largest exporter of the grain, ahead of the United States and Argentina— to ship larger volumes with better returns.
Downward Pressure and Comparison with Argentina
The devaluation also served as an additional incentive for funds operating on the CME Group to continue liquidating soybean, corn and wheat contracts, which led to sharp declines in soybean and soybean meal in Chicago that Monday. In the Argentine A3 Mercados exchange, the phenomenon was replicated with less intensity: the Rosario Soybean November 2026 contract closed at 365.2 dollars per ton, compared to 366.9 dollars the previous Friday, in a context where the theoretical FAS estimated by the Rosario Board of Trade for that date stood at 358.5 dollars per ton.
Regional Repercussions
Lula's victory had an impact beyond Brazil: at the opening of the Santiago Stock Exchange, Chilean stocks exposed to the Brazilian market retreated, with Latam Airlines falling 4.88%, Cencosud 2.80%, Embotelladora Andina Series B 2.04% and CMPC 1.98%, while the IPSA index dropped 1.09% to 10,629.37 points. According to coverage reproduced by Reuters, Lula will face a complex fiscal situation and a Congress with a conservative majority, factors that could constrain his ability to sustain investment and regional trade.
