On the one hand, we see why Bolsonaro is popular among the Ag sector. On the other, we have a potential of increasing production via this land. So as Tango said, it is REAL friendly but not so friendly for commodities, ie coffee. WE are long way from having an answer and even longer way out to see any production increases. So in the near term, I think the policies of Bolsonaro could keep the REAL firm which at some point I would think is a positive for Brazil based commodities.
For now, our market is turning a blind eye to the REAL. IT seems that despite the light volume, after failing the 20MA once again, the fund selling became more aggressive and weighed on the market. Until this tone changes, I find it hard for KC to have a meaningful rally. If we begin to climb and get to a level where the funds ease up, and even begin to reverse course, we can have a better upside conversation.
I would love to hear from our Brazilian friends on the implications of this "indigenous lands" story and what the sentiment is as far as outlook for farmers. We know that current prices will not incentivize more production so this possible development comes at not such an opportune time.
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