Brazil agribusiness quarterly Q2 2026

FX: We expect the US dollar to reach BRL 5.35 by the end of 2026, mainly due to geopolitical risks, fiscal and election-related uncertainties, and US interest rates. However, the depreciation of the Brazilian real should be limited.

Tariffs: The US has proposed new tariffs under Section 301 of the Trade Act, targeting Brazil and other countries. While most Brazilian exports are likely to remain exempt, some key commodities like sugar, ethanol, and soluble coffee, could be impacted.

Weather: A new round of forecasts from the US National Oceanic and Atmospheric Administration confirms El Niño starting in July 2026, with the phenomenon strengthening through the Southern Hemisphere summer.

Farm inputs: The drop in fertilizer imports in April and May already reflects higher fertilizer prices following the start of the conflict in the Middle East.

Cane, sugar, and ethanol: As milling activity moves into top gear, ethanol prices have fallen sharply. The pump price ratio relative to gasoline is now below 60% in São Paulo state, which should support ethanol sales in Q3 2026.

Coffee: Expectations are that a large Brazilian crop will add pressure to global prices, as weather conditions have been favorable for crop development.

Soybeans: Brazilian soybean exports increased by 7% YOY from January to May 2026, according to SECEX (the Brazilian Foreign Trade Secretariat), and are expected to reach 113m metric tons for the full year, an increase of 4m metric tons.

Corn: Compared to the previous report, RaboResearch has revised its corn production estimate upward by 1m metric tons, now projecting a total output of 138m metric tons.

Cotton: Regarding the 2025/26 crop, we expect that the country will register the second-largest lint production in history, estimated at around 4m metric tons.

Beef: The rapid filling of the Chinese quota is likely to pressure beef shipments, with the futures market signaling downward pressure on fed cattle prices starting in Q3 2026.

Orange juice: Despite a smaller crop ahead, weak demand remains a barrier for higher prices as inventories recover.

Dairy: We expect farmgate milk prices to continue recovering in Q3 as supply slows further. Imports are likely to remain elevated during Q3, supported by higher domestic prices.

Pulp: A more balanced supply-demand situation, combined with additional supply cuts, is expected to support a gradual price recovery beginning in late 2026.