Porto Alegre, December 3th, 2024 – The business scenario in Brazil picked up pace over the week, driven mainly by firm prices, with exchange rate swings taking center stage. The market, which had already been pricing in the domestic fiscal risk, showed dissatisfaction with the “spending cuts” proposals announced by the government on Wednesday night (27). In this context, the dollar reached a historic high of around BRL 6.11, which stimulated domestic trade, especially in the physical market with an emphasis on port operations, although the volume of product available on the market is still very limited.
In Passo Fundo (RS), the price of a 60-kilogram bag increased from BRL 132.00 to BRL 135.00 over the week. In Cascavel (PR), prices rose from BRL 136.00 to BRL 140.00. In Rondonópolis (MT), prices on the physical market fell from BRL 145.00 to BRL 144.00. In the port of Paranaguá, prices rose consistently, going from BRL 142.00 to BRL 146.00.
Soybean futures contracts traded on the Chicago Board of Trade (CBOT) closed Friday with mixed prices, near stability. After the holiday and in a shorter session with few transactions, the market was pressured by the good crop development in South America. The pressure was limited by the feeling of firm demand for US soybeans. According to figures from the United States Department of Agriculture (USDA), sales of 840 thousand tons of soybeans were registered for undisclosed destinations. There was also a transaction with 151 thousand tons received.
Net US soybean exports for the 2024/25 season, which began on September 1, totaled 2,490,500 tons in the week ending November 21. For the 2025/26 season, exports hit 18,000 tons. Analysts expected exports of 1.6 to 2.4 mln tons, considering the two seasons. Over the week, the January position increased by 0.69%. In November, there was a depreciation of 0.37%.
The current situation of the dollar should lead Brazil’s Central Bank to significantly increase interest rates, using the monetary brake. The market is already anticipating the risk of inflation, reflected in the rise in interest rates in the time frame. As a result, we have observed a sharp high in interbank deposit rates, with a positive correlation driven by exchange rate variations. In this context, the current Selic rate does not compensate for the opportunity cost of Brazilian bonds, especially compared to safer markets, such as US bonds. Given this, the Central Bank will not have many alternatives other than increasing the Selic rate in the short term.
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