Worries about political uncertainty in Brazil extended to agricultural commodity markets, with the real’s fall triggering declines in corn, soyabeans, coffee and sugar.
“Grain markets are under pressure as traders take a risk-off attitude due to Brazil’s currency falling sharply,” said brokers Allendale.
Brazil is a leading producer of coffee and sugar and is also a large exporter of corn and soyabeans. The commodities are traded in US dollars, and the sharp fall in the country’s currency normally means that exporters will accelerate their sales since they can get more bang for their buck.
ICE July arabica was down 3.4 per cent to $1.277 a pound, despite Brazilian crop supply agency Conab announcing that the 2017 coffee crop would be 11 per cent lower at 45.5m 60kg bags.
ICE July sugar retreated 1.4 per cent to 16.08 cents a pound, and corn was down 1 per cent to $3.68 a bushel, while soyabeans declined 2.3 per cent to $9.53 a bushel.