Brazil Agribusiness Quarterly Q3 2023

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 forecast the USD/BRL to trade at 5.05 by the end of 2023 and at 5.15 by the end of 2024. A lower Selic rate and effects from El Niño could weaken the BRL from current levels in the coming months.

Fertilizers: The last four months of the year will be crucial in determining fertilizer deliveries for 2023. If the situation for corn improves, there is still room for a strong recovery after the drop seen in 2022.

Cane, Sugar, and Ethanol: The harvest is going well, while sugar prices recently hit new highs. Ethanol prices remain subdued, but have become very competitive with gasoline.

Coffee: With the harvest largely completed, Brazilian exports have started to recover. Changes in local demand, increased supply, and improved competitiveness are boosting Brazilian conilon shipments.

Soybeans: Despite lower margins, soybean acreage will increase by 3% in 2023/24. Assuming trend yields, Rabobank´s initial estimate is 163m metric tons, up 8m metric tons from the 2022/23 crop.

Corn: Although current prices are not attractive to farmers, the lack of storage capacity has been the main driver for farmers to sell since the beginning of the ‘safrinha’ harvest. Farmer margins have dropped throughout most of 2023, following lower corn prices.

Cotton: Of the top five cotton producers, only Brazil is set to see an increase in cotton output. ICE and domestic prices are expected to remain largely stable in Q4 2023.

Beef: The recovery in live cattle future prices is making feedlots more attractive, but volatility is likely to continue through the end of the year.

Orange Juice: Global OJ prices are set to continue at very high levels in Q4 2023, with very limited availability as inventories remain at ten-year lows.

Dairy: Domestic demand should finally see some growth in late 2023, as lower prices combined with some wage growth will help consumers regain some of their lost purchasing power.

Pulp: Global pulp prices will continue to rise moderately in Q4 2023 due to strong seasonal demand and record-high unexpected downtime, as margins remain tight for many producers in key regions.

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  • 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

    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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