Brazil Agribusiness Quarterly Q2 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: Fiscal uncertainties, reduced global trade flows, and a narrower interest rate spread imply a depreciation bias. However, a Selic rate at 10.50% to year-end, while the Fed cuts rates, would support the Brazilian real. We see the exchange rate at BRL 5.20/USD by the end of 2024.

Fertilizers: The current situation in the fertilizer market, with higher prices, should affect the national demand for fertilizers in 2024. Consequently, Rabobank is revising its estimate for fertilizer delivery in 2024 downwards.

Cane, sugar, and ethanol: The harvest is proceeding rapidly, but concerns are emerging about cane yields in the final third of the campaign if dry conditions persist. The possible impact of La Niña on the 2025/26 crop is also on the radar.

Coffee: Despite the onset of the harvest season in Brazil, coffee prices remain high. While the conilon/robusta harvest is in full swing, arabica is now ramping up. We project the 2024/25 crop at 69.8m bags (60kg), 5.4% larger compared to the previous cycle.

Soybeans: A rise in CBOT Soybean prices and a weaker BRL have combined to push local prices higher, encouraging farmers to advance with their sales.

Corn: Brazil’s corn exports have reached 7.5m metric tons, 29% below last year’s shipments for the same period. Brazil’s competitiveness has been impacted as a result of high stock levels in the US and increased output in Argentina this year.

Cotton: A significant area expansion, combined with favorable weather conditions, is expected to drive Brazil’s cotton production to reach 3.6m metric tons in the 2023/24 season.

Beef: Supply is slowing, with diminished slaughter of females, while demand for exports is growing with the weakening of the BRL versus the USD. As a result, live cattle prices are now showing signs of a trend reversal.

Orange juice: FCOJ prices should remain at record levels in Q3 as supply side problems continue to add up and stocks remain at depleted levels.

Dairy: Domestic prices have probably peaked and should see some declines as supply gradually recovers due to higher farmer margins. Imports should remain elevated with flat global prices, but a weaker BRL could be an issue for importers.

Pulp: Global pulp prices will probably see some declines in 2H 2024 after gains in recent months, as supply is set to start increasing while demand declines during the summer months of the Northern Hemisphere.

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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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