KCNY and Currency
The coffee contract on the NY stock exchange ended the second week of March with a drop, despite Brazilian export data showing a 33% reduction in the volume exported in February 2023 compared to February 2022. Certified stocks in NY paused their decline and showed two consecutive days of increase, closing on Thursday (March 9th) with 771,326 approved bags and 28,633 bags pending.
The rains returned in the producing regions this week in isolated showers. During the week we had another crop projection report for the 23/24 harvest, released by Marex Solutions, showing total production of 62.94 million bags, divided into 40.50 million bags of Arabica and 22.44 million bags of Conilon.
In the macroeconomic environment, inflation is the topic of the moment. Economic data released in the US during the week show that the economy remains heated there, even with the latest interest rate increases. Such a scenario gives support for possible new increases, further raising the rate that is already at a historically high level.
This Friday’s Payrolls report, the most important data for the American economy, which shows the variation in job openings created, came in higher than expected. However, data on the unemployment rate increased slightly and average hourly earnings decreased, causing the market to improve its mood a bit.
MAY/23: Min: 173,75 | Max: 183,45 | Last: 177,50
BRL/USD: Min: 5,1012 | Max: 5,2171 | Last: 5,1830
*Data as of completion of this report.
According to last week’s forecasts, the hot air mass continued to affect the Southeast region in recent days, which hindered rainfall in almost all coffee-growing regions. Only isolated rainfalls were registered in the South Minas, Mogiana, and Cerrado regions.
With the weakening of the La Niña phenomenon, as we transition from La Niña to a neutral situation, cold fronts have stopped reaching the coast of Espírito Santo, and therefore, it has not rained in the coffee regions of Minas Gerais for almost 30 days. For the next few days, the forecast is for the hot air mass to continue to affect the Southeast region of Brazil.
Rain forecast for the week:
South Minas region: between 20 and 30 mm.
Zona da Mata region: between 10 and 20 mm.
Cerrado region: between 20 and 30 mm.
Alta Mogiana region: between 20 and 30 mm.
Garça region: between 10 and 20 mm.
DOMESTIC MARKET and FOB
As a result of the fall in NY “ICE,” the market has been relatively calm compared to last week, when there was demand in both domestic and foreign markets. Currently, quotes are still coming in for immediate shipments. As for the new crop, the expectation for the differentials to open up is still high.
Strictly soft good cup running screen: seller close to R$ 1.100,00
Strictly soft fine cup running screen: seller close to R$ 1.120,00
Running screen with 30% low grades close to R$ 965,00
17/18 around R$ 1.080,00
14/16 around R$ 1.050,00
600 defects: close to R$ 1.000,00;
According to data from Secex (Foreign Trade Secretariat), Brazilian exports of coffee beans in February 2023 reached 2,040,047 bags of 60 kilograms, with 18 business days (daily average of 113,337 bags). The revenue reached US$ 437.302 million (daily average of US$ 24.294 million), and the average price was US$ 214.36 per bag. The average daily revenue obtained from coffee bean exports in February was 44.3% lower compared to the daily average of February 2022, which was US$ 43.588 million.
The vote on the process of privatizing the Port of Santos was postponed at the ordinary session of the TCU (Federal Court of Accounts) last Wednesday (08/03) in Brasília. The reason was the absence of Minister Vital Rêgo, who had requested a view in December. The matter may return to the agenda on the session next Wednesday (15/03) if Bruno Dantes (minister and president of TCU) – who is the rapporteur – and the three ministers who requested a view are present in the plenary. Ships departing in March still do not present restrictions. No stowage schedule has been affected due to equipment shortage
Atlantica Coffee Team
This analysis report aims only to provide information about the coffee market, based on internal and public sources, valid at the time of its dissemination. It does not aim to guide recipients in making any decisions, which are therefore solely the responsibility of the recipient. Atlantica Coffee is exempt from any liability arising from direct or indirect losses.