NYSE and BRL/USD
An explosion of prices in the coffee market this week. Several factors supported Arabica prices, especially the concern with the world supply and the dollar fall.
Besides the concern with dry weather and logistical issues in Brazil, the problems in Colombia also entered the market’s radar. Furthermore, the ICO has released a cut in the estimate of the global surplus for the 20/21 crop year to 3.286 million bags (1.972 million bags less than the last estimate). Developments in world vaccination have brought optimism of heated demand for the second half of the year.
Early Friday morning, the prices of KCNY contracts suffered major corrections, with over 400 points of decline, giving back part of the gains of recent sessions.
The Real was the most appreciated currency among emerging countries this week, with macro support and driven by the 0.75% increase in Brazil’s basic interest rate, the Selic, to 3.5% p.a. Around 11 am today, news of slowing job growth in the US, caused the dollar to fall worldwide. Against the Brazilian Real the currency traded at R$5.2040, the lowest since January 15th this year.
June/21: Min: 139.60 | Max: 155.40 | Last: 151.70 USC/lb
BRL/USD: Min: 5.2040| Max: 5.4837 | Last: 5.2100
*Data as of the completion of this report
Dry weather remains in Brazilian coffee plantations, which are already facing months of below historical average rainfall. The prevalence of these conditions is worrying for the water reserves in the soil.
For the next two weeks, the forecast of no significant rainfall remains in the Brazilian coffee belt. There is a forecast of rain this weekend only for the South of Bahia.
The prices of coffee in the domestic market are very high. The Arabica hard drink type 6/7 was negotiated between R$ 750 – 850 in physicals, and for future delivery reached over R$ 900. Even with very attractive prices, producers have been cautious and calm in their offers, paying close attention to weather.
Some shipowners are already overbooked until the end of June, not accepting more reservations. The lack of standard food containers, port omissions, ship delays, and postponements, and reduced free time persist. The difficulty is even greater when the destination is in the USA.
Customers, please send your shipping instructions in advance!
COVID-19 IN BRAZIL
People who received the first dose: + 34 mi (+16.16% of the population)
Fully vaccinated people: + 17 mi (8.19% of the population)
Cases: + 15 mi
Deaths: + 417 K
Let’s keep believing and investing in the coffee culture!
Atlantica Coffee Team