BTG Pactual Boosts SLC Agrícola Profit Forecast on Recovering Commodity Prices
SLC Agrícola's acquisition spree may finally be paying off as commodity prices recover. BTG Pactual has more than doubled its forecast for SLC's 2027 net income to about $147 million (763 million reais), citing a shift in the commodity cycle towards higher prices.
The bank expects a tighter global supply-demand balance for soybeans, corn and cotton to support margins. This comes as cotton prices have risen 17% over the past two months, while soybean prices have gained about 10%. BTG analysts note that improving agricultural fundamentals are driving the move, rather than just higher oil prices.
Global inventories have tightened significantly compared with recent years, according to US Department of Agriculture data. The global soybean market is expected to post its smallest surplus in five years in the next season, while corn consumption is projected to exceed production by 24 million metric tons.