Brazil Agribusiness Quarterly Q1 2024

Here are the main highlights for some of Brazil’s key agribusiness sectors. The full report provides a complete outlook for all sectors and the developments to watch in the upcoming weeks.

Highlights include:

FX: We see the BRL at 5.0 per USD by the end of 2024. Fiscal uncertainties, smaller global trade flows and interest-rate spreads bring a depreciation bias. However, a possible benign global environment could mitigate those risks.

Fertilizers: After a sizeable recovery in fertilizer demand in Brazil in 2023, Rabobank estimates a new record in fertilizer deliveries in 2024. Nevertheless, a tighter margin scenario due to lower grain prices is a challenge for Brazilian farmers this year.

Cane, Sugar, and Ethanol: We expect 51.5% of the 2024/25 Center/South’s cane crop to be used for sugar. World raw prices have found support at USc 20/lb-USc-22/lb, while ethanol should see a return to a more balanced market after a difficult 2023/24.

Coffee: Rabobank estimates the Brazilian 2024/25 coffee crop at 69.8m bags (60 kg), 5.7% higher compared to the previous cycle, but below potential.

Soybeans: Growers are still hoping for a price rebound due to a lower soybean harvest in Brazil. According to IMEA, 46% of the expected 2023/24 soybean production is already sold in Mato Grosso – the lowest historical levels.

Corn: Total corn harvest is expected to reach 123m metric tons. A consistent reduction in corn prices – which were dropped by 34% year-to-date – discouraged farmers from planting safrinha.

Cotton: The total cotton planted area will reach a 30-year record and is expected to achieve 1.9m hectares, representing a 16% gain compared to the previous season.

Beef: Lower rainfall combined with a seasonal drop in domestic demand, put negative pressure on live cattle prices in the futures market. This scenario increased slaughters, especially of females.

Orange Juice: FCOJ prices close to record levels in Q2 2024 as the market awaits Fundecitrus’ first crop forecast in May. Rabobank expects output to range between 250m and 290m boxes in 2024/25, lower than the 300m boxes seen in 2023/24.

Dairy: Domestic prices are rising due to lower milk production and slightly higher consumer demand. Imports should remain competitive in 1H 2024, however we don’t anticipate a surge in imported milk as seen in 2023.

Pulp: Global pulp prices will remain under some pressure in Q2 2024, with increasing supply from new capacity in South America. Domestic corrugated board sales set to show some growth in 2024 as the economy continues to grow.

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2023

  • Andy Duff

    Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar
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  • Andrés Padilla

    Senior Analyst - Beverages, Dairy,Packaging & Logistics
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  • Guilherme Morya

    Senior Analyst - Beverages
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  • Marcela Marini

    Senior Analyst – Grains & Oilseeds
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  • Bruno Fonseca

    Senior Analyst – Farm Inputs
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  • Wagner Yanaguizawa

    Analyst - Animal Protein
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