Brazil's beef cattle market faces low physical prices and futures rally

In early July, Brazil's physical boi gordo price fell to R$ 326.3 per arroba, the lowest level since January 2026, as producers withheld cattle amid a dispute with slaughterhouses. Meanwhile, futures contracts on the B3 exchange surged, with open interest jumping to 50,573 contracts, driven by strong demand for the October 2026 contract.

Analysts expect the price of the arroba to rise in the fourth quarter of 2026, potentially breaking the R$ 360 per arroba barrier by early 2027, supported by projected demand from China, the United States and strong domestic consumption. The bezerro price has diverged from boi gordo, remaining stable or higher when measured per head, while its per‑arroba price slipped slightly, widening the gap between calf and adult cattle values.

Export dynamics also influence the market: China's quota of 1.1 million tonnes is near exhaustion, reducing Brazilian shipments, but a rebound in Chinese and U.S. demand is anticipated later in the year, which could sustain price gains.