Brazil Agribusiness Quarterly Q3 2020

This quarterly update on Brazilian agriculture provides a market outlook for sugarcane, corn, coffee, and other key commodities, and gives an overview of what developments to watch in the weeks to come.

Highlights include:

Brazil’s seven-day moving average of Covid-19 fatalities has shown a downward trend more clearly, approaching mid-May levels. As a result, mobility indicators and high-frequency activity data have recovered much of the declines resulting from the economic halt and are close to pre-pandemic levels.

A devalued BRL has boosted farmer selling of soybeans for the 2020/21 season, while corn producers have been unwilling to sell in the spot market, even with the entry of the second crop corn supply.

Sugar exports have been brisk, reaching close to 7m metric tons in July/August. Domestic ethanol consumption continues to recover gradually, with prices at levels similar to a year ago.

Beef exports continue to be guided by strong Chinese demand. The extension of the financial aid package until the end of the year will bring greater support to live cattle prices in both the physical and the future markets.

Though social distancing measures implemented in March led to a sharp contraction of activity in Q2 2020, the government’s steps to smooth socioeconomic impacts have moved Brazil closer to the group of countries less economically hit by Covid-19. For the second half of 2020, we expect a gradual recovery, but the lack of a vaccine, concerns over a worsening fiscal outlook, and deterioration of the labor market reduce the likelihood of a ‘V-shaped’ recovery for the broad economy.

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  • Andy Duff

    Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar
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  • Matheus Almeida

    Senior Analyst – Farm Inputs
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  • Wagner Yanaguizawa

    Analyst - Animal Protein
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  • Guilherme Morya

    Analyst - Beverages
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  • Andrés Padilla

    Senior Analyst - Beverages, Dairy, F&A Supply Chains
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  • Victor Ikeda

    Senior Analyst - Grains & Oilseeds
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