KCNY and Currency
The week in NY started significantly bullish, adjusting to a 460-point high on Monday, March 21st. The fundamental factors remain unchanged. Yesterday the market had a significant drop, mainly for technical reasons, as the market couldn’t renew the new highs of the week until Wednesday.
The inflow of foreign money into Brazil continues strong throughout the year, favored by the rise in interest rates and in the prices of commodities. The dollar yesterday reached the lowest price since 2020, at 4.7641 Brazilian Real.
• Rabobank reduced its estimate of the 22/23 crop from 66.5 to 64.5 million 60-kg bags. According to the bank, after visiting 229 farms, it was realized that the initial flowering did not fulfill its promise, leading the institution to reduce its estimate. Arabica production is estimated at 41.4 million 60-kg bags and conilon at 23.1 million 60-kg bags;
• NY “ICE” certified stocks are rising and closed Thursday at 1,140,064 60-kg bags;
• According to Reuters, the trading of coffee from Vietnam was slow during the week, mainly due to low demand and low supply with the production running out;
• The consultancy Safras & Mercado released that coffee exports from Brazil should grow 3% in 22/23 to 39.25 million 60kg bags compared to the previous crop year 21/22;
• The consultancy Safras & Mercado estimates that for the 22/23 crop year the coffee consumption in Brazil will be 21.6 million 60kg bags, compared to 21.4 million in 21/22 and 21.2 million in 20/21;
MAY/22: Min: 219,40 | Max: 228,64 | Last: 221,15
BRL/USD: Min: 4,7641 | Max: 5,0287 | Last: 4,7850
*Data as of the completion of this report
WEATHER
The polar air mass that arrived in the last few days in the Southeast region was the first of the autumn and it arrived with weak intensity, because its center was already in the Atlantic Ocean and it moved quickly away from the continent.
A new cold front arrives in Minas Gerais on Sunday afternoon and it is expected to organize rains in all coffee regions between Sunday and Wednesday. The highest rainfall volumes should be observed in the Sul de Minas, Zona da Mata and Mogiana regions. There is no forecast for a sharp drop in temperatures because the polar air mass is weak.
Rain forecast for next week:
- Sul de Minas region: between 45 and 55 mm;
- Zona da Mata region: between 35 and 45 mm;
- Cerrado region: between 20 and 45 mm;
- Garça region: between 15 and 25 mm;
- Alta Mogiana region: between 35 and 45 mm.
DOMESTIC MARKET and FOB
The local market lacks liquidity due to the volatility of the NY “ICE” and to the strengthening of the Real against the dollar. Buyers and sellers are distant.
Strictly soft good cup running screen: seller close to R$ 1.230,00;
Strictly soft fine cup running screen: seller close to R$ 1.270,00;
Rio Minas:
17/18: R$ 1.270,00
14/16: R$ 1.230,00
Running screen with 30% low grades: betwenn R$ 1.160,00 and R$ 1.170,00;
600 defects without buyer over the week, seller close to R$ 1.170,00 but with no business reported.
FOB market with little demand and few deals reported.
LOGISTICS
The main US and European ports are very space-constrained. Oakland presents the most critical situation and Hapag Lloyd announced the suspension of the MPS service (Rio de Janeiro to Oakland) this week.
Shipowners of Hapag Lloyd and Hamburg Sud have again presented a low stock of food standard equipment. Again we alert to the need for the conclusion of freight negotiations for April onwards.
COVID-19 IN BRAZIL
People who received the first dose: +174.318.247 (81,61% of the population)
People fully vaccinated: +159.634.287 (74,31% of the population)
Cases: + 29.764.701 million
Deaths: 658.367
Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team
FRAUD ALERT
Fraudsters have created accounts at the domains atlanticacoffeee.com (with 3 letters “e”), atlanticacoffees (plural) and atlantlcacoffee (using the lowercase of L instead of the letter i) and for the prefixes using the names of our employees, even imitating our signatures. They are quoting coffee, issuing invoices with altered payment data, mostly to banks in Hong Kong, which we are not ours! Please be aware of the sender of the messages and always question instructions to change bank details!
Our only official e-mail domain is: atlanticacoffee.com