The Golden Arches Fall & OPEC+ Cuts Output

Author

Faro Capital
April 03, 2023

Good Morning,

U.S. stocks ended higher on Friday with PCE coming in lower than expectations at 4.6%. While inflation dropped a bit some Fed officials signaled that more tightening might need to take place. Over the weekend news broke that the parent company of UFC is in talks to buy WWE, McDonalds is preparing to issue layoffs, and OPEC+ announced a big production cut.

Canadian stocks ended higher as well with leaders being the financial sector. Brazil stocks ended lower on Friday due to the new proposed fiscal policies presented by Lula. Uruguay reported a trade deficit of $104.8M in Feb 2023 vs $101.2M same time last year.

Markets: Before the Open

Top News Stories

Canada

  • WestJest pilots vote to strike after negotiations fail (BNN)

  • Invesco to downsize in Canada, cutting 40 jobs (BNN)

  • Rogers-Shaw deal has closed and these are the conditions (BNN)

  • Regency Silver increased its private placement to $2.5M at $0.40 per share (CBJ)

  • Canada’s national carbon price per ton will increase $65, rebates will also increase (CBC)

U.S.

  • Tesla reported its deliveries & production for Q1 (CNBC)

  • Tesla will recall semi-trucks after brake issues (CNBC)

  • UBS to cut 30% of its staff after merger with Credit Suisse (BBG)

  • A U.S. labor complaint was resolved at VU manufacturing in Northern Mexico (RT)

  • With U.S. & China chip wars China is now taking a swipe at Micron (BBG)

  • WWE is in talks to be bought by UFC parent Endeavor (CNBC)

Argentina

  • Argentine poultry exports to resume after a bid flu outbreak (RT)

  • IMF greens light $5.3B in loan aid to Argentina (BAT)

  • U.S. judge ruled in favor of Petersen Energia & against Argentina in a YPF oil takeover (BAT)

Brazil

  • Brazil unemployment rose to 8.6% (RT)

  • Brazil’s GDP to GDP rose to 73% in February (RT)

  • Brazilian state Paraná reports record soybean harvest (RIO)

Colombia

  • Due to the airline crisis in Colombia, demand for passenger trucks rise 5% (PORT)

  • With the closures of Ultra Air & Viva, passenger volumes dropped 10.2% (PORT)

Dominican Republic

  • Central bank of the Dominican Republic kept its key rate at 8.5% (ELD)

  • Banco Caribe’s deposits grew 11.6%, investment portfolio grew 44.2%, and grew overall activities by $720M (ELD)

Ecuador

  • Ecuadorian central bank drops 2023 growth forecast due to lower oil sales (RT)

Peru

  • Inflation in Lima rose 1.25% to a level of 8.4% (ELC)

  • Rio Tinto will coinvest with a Canadian miner and form an entity for mining operations in Peru, the project is valued at $5B (GES)

Mexico

  • Mexico and the U.K. signed a trade agreement on cheese and dairy exports (ELF)

  • Mexico unemployment is at historic lows, february levels were at 2.79% (ELF)

  • Mexico grain production dropped in January by 8% (MB)

  • Grupo Aeroportuario issued sustainability bonds worth $298M (MB)

Venezuela

  • The Venezuelan government investigates corruption in the state owned metals company (RT)

Venture Capital

  • Chile’s Toku raised $7.15M in a seed round to expand Latin American operations (FNN)

  • Momofuku Goods raises $17.5M in a Series A round led by Sidhi Capital (FoodDrive)

  • Brazil’s Agrotools penetrates the North American market (Globalnewswire)

  • Digital health company Wellth raised $20M in a Series B round led by SignalFire (finsmes)

  • Chicago AI startup Ludex raises $8M in seed funding (finsmes)

  • Mexican Paytech company Pacto raised $4M in a funding round led by DILA Capital (latamlist)

  • Colombian restaurant chain Bacu raised $6M in seed funding led by Benchstrenght Capital (latamlist)

Insights

Brazil’s egg production has steadily increased in recent years. In 2020 Brazil produced 53 billion eggs, ranked fifth highest producer in the world, and the highest in South America. Data from the Brazilian Institute of Geography and Statistics showed that in 2022 Brazil produced 48 billion eggs. A Rio Times article states that the national industry keeps about 180 million hens for egg production.

On average each hen lays around 270 eggs yearly.

Out of all production 99.69% is for the domestic market and 0.31% are destined for foreign markets. An interesting development is Brazilian eggs are beating U.S. exports in the Dominican Republic. According to an article by the PoultrySite Brazilian exports of eggs in June 2022 accounted for 44% of eggs imported after 25% of imports in 2021 and 0% in 2020. The decline of U.S. eggs in the Dominican Republic were due to implementation of Law 6-22 that removed tariffs of imported foods and Avian flu in the United States.

Brazil’s “egg capital” is located in Bastos, São Paulo, where 6% of all eggs in Brazil are produced. According to World Crunch the city of Bastos has over 500 chickens per person.

The city produces 6,200 eggs per minute.

The Brazilian Association of Animal Protein’s steering Committee set out target markets for Brazilian eggs:

· Germany

· Saudi Arabia

· Argentina

· Chile

· Ecuador

· Mexico

· Singapore

· Uruguay

With the expansion of Brazilian production and re-shifting of supply chains worldwide, it will be an interesting future for Brazilian eggs.

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