Radar Perene / Archive / episode

The awakening that left commodities behind

◦ Written under index methodology v1 (in effect until 15 Jul 2026). The current series is v2 — readings quoted here may differ from those shown today. See the methodology.

Episode

The extreme

For months the domestic investor stayed pinned to the floor, unreactive. When it finally woke up, it did something curious: it set off without the raw materials. The money flowed back into the local stock market and left the export complex on the dock. In numbers: the Ânima Index jumped from 20.6 to 46.5, the largest mood awakening of the year, while the ratio between commodities and the IBOV sank well below its own average — and measured in reais, deeper still. The Selic stayed nailed at 13.75% per year and the month's IPCA marked just 0.23%, with the dollar at R$ 4.98.

What happened next

The dock got emptier before it filled. By July, the ratio in reais had already plunged to one of the floors of the archive — the abandonment of May had not touched bottom. Only in August 2023 came the first recovery: the bloc regained part of the lost ground, when the euphoria eased and the money went back to hunting for what was cheap. But the return was hesitant. In November, with the stock market rising led by cyclicals and financials, commodities did the opposite and pulled away again — they did not board the domestic party. Full rehabilitation only arrived a year later: in May 2024, the ratio leapt in a single move back to the top. Except the reason was not appetite — it was the real at R$ 5.13.

What did not happen

The raw materials were not left behind out of weakness in the country — they were left because the local stock market found better stories. And when they returned to the top, they did not return on their own merit: it was not global demand that rescued them, it was the exchange rate. The naive reading — "commodities at the top, so the world wants Brazil again" — would have confused a weak currency with real appetite. The May 2024 leap was currency shelter, not a cycle resumption.

The honest verdict

The Radar got the direction right: capital did indeed abandon the export complex when domestic mood woke up. But May's abandonment was not the floor — July was worse. And the bigger lesson came only later: the strength of a commodity measured in reais is, almost always, the shadow of the dollar, not the will to take risk. Whoever reads the top without looking at the exchange rate reads half the chart.

Continue reading: Commodities in reais · The exchange rate that ran 2024 · When the currency dictates the harvest →

The Radar reads these regimes every day. See today's reading →

Characters: Commodities