JPM-Rumo Mato Grosso Harvest Tracker(Aug. 18) Higher Corn：...-20250818

The Mato Grosso Agribusiness Institute (IMEA) has published its weekly update onthe soybean and corn harvest. We remain OW on RAIL3, trading at 5.7x EV/EBITDA12M Fwd.

•Corn. Corn production for the 2024/25 season in Mato Grosso remainsunchanged at 55 million tons (+15% y/y). The commercialization rate for the2024/25 season reached 62% in July, up 11.95 p.p. m/m, while for the 2025/26harvest it is at 11.4%, +4.6 p.p. m/m (still below the previous five-year averageby 8.4 p.p.), driven by the price increases. Production costs for the 2025/26 cornharvest was up 1.4% from the previous estimate and now is expected at R$3,279/hc, due to increased fertilizer prices. As of August 12th, USDAincreased its estimates for the U.S. corn production by 6% to 425 million tonsfor the 2025/26 season (+13% y/y), with exports amounting to 73 million tons(+2% y/y, revised upwards by 7%).

•Soybean. Soybean production for 2024/25 is at 50.9 million tons (+30% y/y)while expectations for the 2025/26 crop are at 47.2 million tons (-7% y/y). Asof July, commercialization of the 2024/25 crop reached 89%, +6.8 p.p. m/m,while for the 2025/26 season, commercialization reached 22.5%, +5.0 p.p. m/m. Overall production costs have been adjusted upward by 1% from theprevious estimate, now anticipated to be R$4,183/hc, primarily due toincreased fertilizer prices. As the soybean season is set to commence nextmonth, producers currently procuring supplies are likely to encounter elevatedprices.

•Spot Freight Truck Rates. As of August 18 th , the Sorriso-Santos truck freightrate was -2.6% w/w and +2.4% y/y, while the Sorriso-Miritituba rate was+0.8% w/w and +19.4% y/y.

•J.P. Morgan view on Rumo (RAIL3, OW). Since the company reported2Q25 earnings, stock has underperformed IBOV by 7 p.p. and we believe therecent underperformance is unwarranted, despite recognizing the short- tomid-term challenges. The stock currently lacks immediate catalysts and facesreduced visibility into Rumo's operational performance. Despite anticipatingyield growth below inflation and making slight adjustments to operationalestimates for the coming years, the stock remains attractive, trading at a 5.7xEV/EBITDA 12-month forward, which is approximately a 40% discountcompared to historical levels - click here for our latest update.