Adecoagro SA (NYSE:AGRO) stock fell 0.60% (As on July 2, 11:20:09 AM UTC-4, Source: Google Finance) after JPMorgan upgraded the company to Neutral from Underweight with a price target of $11.50, up from $10.50. The firm thinks sugar and ethanol prices have limited downside risk from this point, while the weaker real, a good perspective for Argentine crops and a “reasonable” valuation make it more constructive about the investment case.

Meanwhile, Crushing volumes during 1Q24 amounted to 2.2 million tons, 47.3% higher year-over-year and an all time record for a 1Q milling figure. This was mainly driven by greater sugarcane availability versus the previous period. In 1Q24, Adjusted EBITDA for the Farming business amounted to $44.0 million, $25.5 million higher compared to 1Q23. This was driven by an outperformance in all three segments. Our Rice business presented a year-over-year increase of $19.4 million, mainly explained by (i) a better campaign in terms of area, productivity and prices, leading to a $12.7 million year-over-year gain in the mark-to-market of our biological assets; coupled with (ii) the presence in both the export and domestic market which enabled us to conduct sales at attractive prices ($433/ton higher versus 1Q23) as the company were the only rice producer with available stocks at a moment when rice supply was limited. In the case of Crops, the full recovery in yields of our main grains was the main reason behind the $5.8 million year-over-year. In the Rice segment the company have a positive outlook due to (i) higher production on better yields and more planted area; (ii) the production capabilities to produce higher value added products; and (iii) the commercial flexibility to sell into the domestic and export market. In the case of Dairy, the company’s outlook remains positive on the back of the continuous focus on achieving efficiencies in the vertically-integrated operations, and the ability to shift processing production to the product that offers the highest margin contribution. During the first three months of the year, crushing volume amounted to 2.2 million tons, 0.7 million tons higher compared to the same period of last year and an all time record for a 1Q milling figure.

Additionally, in April 2024, the company has completed the sale of La Pecuaria farm located in the Province of Durazno, Uruguay, for a selling price of $20.7 million ($6,500/hectare) fully collected at the closing date. The transaction generated an Adjusted EBITDA of $15.3 million, which will be booked in the Crops segment in 2Q24.