KCNY and Currency
The week was marked by an increase in trading volume on the ICE and the market reaching levels similar to those before the 2021 freeze in Brazil. In addition to the market decline, spreads have returned to showing positive carry for future expirations. Constant rains in the first days of the year and more predictions for the producing regions generate expectations for the next crop in Brazil. Inflation, which concerned the market last week, showed signs of relief this week, demonstrated by the decline in the American CPI, which may lead to an increase in consumption.
MARCH/23: Min: 142,05 | Max: 161,20 | Last: 151,35
BRL/USD: Min: 5,0690 | Max: 5,3085 | Last: 5,0940
*Data as of completion of this report.
The cold front between the states of Minas Gerais and São Paulo will dissipate by the weekend, however, typical rainy season showers are still expected to continue in the Brazilian coffee-growing regions.
Rainfall volume observed in the first two weeks of January:
Zona da Mata: around average, 202 mm;
South Minas: 192 mm, about 72% of the historical average;
Cerrado: 360 mm, 35% above the historical average;
Mogiana: 195 mm, about 67% of the historical average;
Garça: 135 mm, about 54% of the historical average.
Rain forecast for the week:
South Minas region: between 50 and 80 mm.
Zona da Mata region: between 30 and 40 mm.
Cerrado region: between 50 and 80 mm.
Alta Mogiana region: between 60 and 70 mm.
Garça region: between 60 and 70 mm.
DOMESTIC MARKET and FOB
Week of low liquidity in the physical market. NY fluctuating, making differentials narrow as prices in the domestic market do not follow the movement.
Coffees are being offered at positive differentials, while on FOB, there is demand for shipments for the month of February and for certificates.
Strictly soft good cup running screen: seller close to R$ 870,00
Strictly soft fine cup running screen: seller close to R$ 920,00
Running screen with 30% low grades close to R$ 870,00;
17/18 around R$ 1.000,00
14/16 around R$ 980,00.
600 defects: close to R$ 900,00;
*Seller bases, with few reported deals
The freight market for spot still shows a drop in relation to the rates negotiated previously, for longer-term agreements.
There was no need to reschedule or cancel shipments, however, some carriers have shown delays in the release of empty containers. There was also, again, a reduction in the standard free time of some carriers.
Ships heading to European ports are already showing restrictions on ships leaving within the next 6 weeks
Atlantica Coffee Team