Soybeans Fall to Two-Month Low as Lula Win Lifts Brazil-China Trade Outlook

Chicago soybean futures fell to a two-month low after Luiz Inácio Lula da Silva's presidential election win in Brazil raised expectations of closer ties with China, potentially eroding the U.S. share of the world's largest soybean import market. The most-actively traded Chicago Board of Trade contract dropped as much as 1.7% to its lowest since August 26. Lula defeated Flávio Bolsonaro, a result described as a political upset and a setback for investors who had backed Bolsonaro to curb the country's deficit. Brazil has steadily gained share in China, supplying nearly 80% of the Asian nation's soybean imports in the first nine months of the year despite Beijing's trade deal with the U.S., its second-largest supplier. "Lula is pro-exports of beans to China, so that is bearish US soybeans if Brazil can fulfill more of China's needs," said Joe Davis, director of commodity sales at Futures International LLC. Under Lula, Brazilian farm goods have won wider market access while China has expanded investment in port infrastructure, including Cofco Corp. terminals at Santos.