KCNY and Currency
NY ICE market was marked by low business volume during the week. In the physical market, differentials remain expensive due to the lack of offers with prices that generate liquidity and attractiveness of business for Brazilian coffee. It is important to note that there is availability of coffee for new business, however, as mentioned above, the seller’s prices are far from the buyer’s interest.
La Niña is also a factor strengthening the bullish trend in the market, as it is largely responsible for the recent decrease in Colombian production, and it also acts in Brazil, causing climate change and doubts about its impact on 23/24 production. On the other hand, it is notable the shortage of coffee demand from importing countries this December and the doubts about the impacts of the recent recession on coffee consumption persist.
The currency also showed little traded volume during the week and volatility was noticed in the market due to the political uncertainties that are arising for next year.
- The NY “ICE” certified stocK closed on Wednesday at 808,201 bags of 60 kg;
- According to the Commoditiy Futures Trading Commission (CFTC) report, funds decreased their short position by 4,061 lots, to 16,429 lots;
MARCH/23: Min: 165,70 | Max: 174,95 | Last: 167,30
BRL/USD: Min: 5,18 | Max: 5,32 | Last: 5,27
WEATHER
Due to the action of the La Niña phenomenon, cold fronts arrived very frequently in the Southeast region in November and December. During these two months, the South Atlantic Convergence Zone (SACZ) was formed, bringing a lot of moisture from the Amazon towards the Atlantic Ocean and, as a result, the rainfall was slightly above the historical average in the southern regions and in the Zona da Mata. In the other regions the rainfall was below the historical average in almost every month.
Below is the sum of the average rainfall in the producing regions in the months of November and December/2022 versus historical average:
Zona da Mata: 603 mm in 2022, versus historical average of 506 mm
Sul de Minas: 629 mm in 2022, versus historical average of 444 mm
Cerrado: 432,80 mm in 2022, versus historical average of 473 mm
Mogiana: 387,30 mm in 2022, versus historical average of 470 mm
A cold front is expected to remain partially stationary between the states of Minas Gerais and São Paulo, causing moderate rain during the week.
Rain forecast for the week:
South of Minas: between 45 and 55 mm.
Zona da Mata: between 40 and 50 mm.
Cerrado: between 45 and 55 mm.
Alta Mogiana: between 120 and 150 mm.
Garça: between 60 and 80 mm.
DOMESTIC MARKET AND FOB
The FOB and domestic market had low liquidity and few businesses reported.
Strictly soft good cup running screen: close to R$ 1.030,00.
Strictly soft fine cup running screen: close to R$ 1.070,00.
Running screen with 30% low grades: close to R$ 960,00.
17/18: R$ 1.040,00.
14/16: R$ 1.020,00,
600 defects: sellers close to R$940,00.
LOGISTICS
There was no declines in new bookings requests for ships leaving in January due to lack of space. No shipments were postponed or canceled due to lack of containers, although container terminals and ship owners still report low stocks.
The year 2022 comes to an end and it was challenging in many ways. However, several challenges and obstacles were overcome and we are sure that we delivered the best we could in each process and to each client.
Thank you for being by our side, we wish you all a happy new year!
Atlantica Coffee Team