KCNY and Currency
The NY ICE market kept volatility during the week, at first perpetuating the devaluation trend of the previous week and, later, prevailing the bullish movements, reflecting the appreciation of the Brazilian Real against the Dollar. The demand for new business remains sluggish, as well as the stocks certified in NY “ICE” have been recomposed, which holds higher highs in face of the exchange rate movement.
During the last few weeks in Brazil, rainfall in coffee producing regions has been abundant and favors the prospects of a crop of high production and granation, in addition to the good expectations already shown in the post-flower setting and development. On the other hand, many show uncertainty about the actual size of the crop and about a production much above 22/23. As for Colombia, the second largest producer of Arabica coffee in the world and the largest producer of washed coffee, it is known that the impacts of La Ninã in previous crops were strong and the fears about the impacts for the future continue.
- On Tuesday, the United States Department of Agriculture (USDA) lowered its production forecast for the 22/23 crop by approximately 2.4 million 60kg bags between Arabica and Robusta, down from the previous forecast in July of this year. Arabica production was revised down by about 2.2 million 60kg bags. This still represents a production increase of 4% in relation to the USDA figure for the 21/22 crop.
- Still according to the USDA, world coffee consumption should be approximately 167.9 million 60kg bags;
- The NY “ICE” certified stock closed Wednesday at 788,275 60 kg bags;
MARCH/23: Min: 162,55 | Max: 172,65 | Last: 171,90
BRL/USD: Min: 5,1160 | Max: 5,3396 | Last: 5,1340
*Data as of completion of this report.
WEATHER
This spring was marked by above average rainfall in the Zona da Mata and Cerrado coffee regions. In the southern coffee regions, Mogiana and Garça, the rains were slightly below the historical average. The cold fronts that arrived in the Southeast were mostly stationary between Minas and Bahia.
For the summer, the weather models are predicting rainfall above the historical average in the southern coffee regions, Mogiana and Garça. In the Zona da Mata and Cerrado coffee regions, the rainfall is expected to be between 20 and 30% below the historical average in January and March, and around 40% of the historical average in February.
Rain forecast for the week:
Sul de Minas region: between 40 and 50 mm.
Zona da Mata region: between 10 and 20 mm.
Cerrado region: between 10 and 20 mm.
Alta Mogiana region: between 40 and 50 mm.
Garça region: between 50 and 60 mm.
DOMESTIC MARKET AND FOB
The FOB market with few trades and low liquidity, while the domestic market has a variety of coffees on offer but not many trades have been reported due to high replacement prices.
Strictly soft good cup running screen: close to R$ 1.010,00
Strictly soft fine cup running screen: close to R$ 1.050,00
Rio Minas:
Running screen with 30% low grades: close to R$ 960,00.
17/18: R$ 1.040,00
14/16: R$ 1.020,00
These are buyers ideas – very few businesses reported.
600 defects: sellers close to R$940,00
LOGISTICS
Stocks of standard container food remain low. Some schedules could not be kept and had to be postponed. Ships leaving in Jan-23 still have space and there has been no declines in new bookings due to lack of space.
The Port of Itaguaí continues to suffer from cargo cut-offs, resulting in delays in some shipments, with cargo already stuffed and delivered to the port terminal.
We wish you a Merry Christmas, full of blessings for you and your family!
Atlantica Coffee Team