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DTN analysts discuss the May 18 drop of about 31 cents in July soybeans, which followed a 6.5% fall in Brazil's real. The column links the currency move to corruption allegations involving President Temer and JBS SA, and reports that JBS reportedly bought large amounts of dollars shortly before the tapes news.
Analysts questioned whether the drop was a true black swan or a manipulated move, and noted soybeans had since rebounded.
Political shocks that move the Brazilian real can quickly shift Brazilian farmer selling and CBOT soybean prices, so traders face higher short-term volatility.
dtnpf.comMay 23, 2017After 50 past neutral macro events, Soybeans moved a median -0.3% over 5 sessions (48% higher; middle half -2.2% to +1.3%), and -0.8% over 20.
After 92 past neutral macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (58% higher; middle half -0.7% to +1.4%), and +0.4% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
