LatAm Agribusiness Sao Martinho (N) & Adecoagro (UW): Sliding on Oil; We See Downside Risk to Consensus on Falling Commodity Prices

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LatAm Agribusiness Sao Martinho (N) & Adecoagro (UW): Sliding on Oil; We See Downside Risk to Consensus on Falling Commodity Prices

J P M O R G A N Latin America Equity Research

14 June 2026

LatAm Agribusiness

Sao Martinho (N) & Adecoagro (UW): Sliding on Oil; We

See Downside Risk to Consensus on Falling

Commodity Prices

We are updating our models for São Martinho and Adecoagro, keeping a cautious LatAm Food & Beverages and

tone on the sugar and ethanol sector and estimates mostly below consensus. Stocks Agribusiness

have been overall tracking oil, which remains very volatile in the short-term. But Lucas Ferreira AC

when we look at fundamentals, we think the overall travel trajectory for (55-11) 4950-3629

commodities produced by SMTO and AGRO are either flat or south. (1) JPM lucas.x.ferreira@jpmorgan.com

estimates oil to be at $65/bbl by the end of 2027 because of easing tensions; (2) We Banco J.P. Morgan S.A.

see Brazil ethanol at a 2.6bn liter oversupply in 2026. Prices are now below the cost Larissa Perez

of production for cane producers, but above that for corn producers, which makes (55-11) 4950-6400

larissa.perez@jpmchase.com

us believe this could be a painful crop for a good part of cane ethanol makers. (3) Banco J.P. Morgan S.A.

We see limited downside risk for sugar, given prices are below cost of production Froylan Mendez

in several producing regions. At the same time, there is selling pressure on the (52-55) 5540-9482

commodity as producers will sell futures to protect a bigger crop. (3) We believe froylan.mendez@jpmchase.com

urea will be under pressure, assuming oil moves lower and supply constraints are J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P.

Morgan Grupo Financiero

gradually relieved. Also, an unfavorable barter ratio with corn indicates weaker