SAO PAULO, June 6 (Reuters) - Brazilian soybean and

cotton companies on Thursday joined the biofuels and food

lobbies to blast new rules for use of tax credits, increasing

the odds the measure will be rejected by a Congress heavily

influenced by farming interests.

Backlash for the measure represents the latest test in

President Luiz Inacio Lula da Silva's shaky relationship with

the powerful agribusiness sector, which had supported his

far-right predecessor, Jair Bolsonaro.

The new measure on tightening the use of tax credits was

included in an executive order sent to Congress on Tuesday. It

takes effect immediately but needs Congressional approval within

four months to remain valid.

Abiove, which represents soybean processors including Bunge

and Cargill, claim the move will make them less

competitive, penalizing soy farmers and putting investment plans

at risk.

According to Abiove, the measure will destroy value across

the entire supply chain, force down prices paid to soy growers

by 4% "and impact the current value of soy by up to 5%."

Soymeal futures rallied on Wednesday, a day after

announcement of the measure, which affects firms deeply engaged

in agricultural commodities, Arlan Suderman, chief economist at

StoneX, said on Thursday in a morning commentary.

He said that because soybean processors and biofuel

producers will essentially have higher tax costs and lower

margins, "that loss of revenue is expected to shift some crush

and biofuel activity to Argentina and to the United States,

although the scope of that shift is not yet known."

Anec and Anea, which speak for grains and cotton exporters,

said the measure reverses a set of rules benefiting commodities

traders that has existed for 20 years, calling it "a grave

institutional setback."

Both called on Congress to reject the rule immediately or

else open an ample debate with the companies to discuss its

impact.

Anec members alone account for 74% of Brazilian corn and

soybean exports worth $66.86 billion, while Anea members made

Brazil a leading cotton exporter on the world market, their

joint statement said.