KCNY and Currency
We reached the end of a week with a lot of volatility in KCNY and also in the dollar rate, influenced mainly by the external environment of risk aversion. The dollar opened Monday (13) on a high note, in response to news of the bankruptcy of the American Silicon Valley Bank, which generated some caution about interest rates and American inflation. Continuing the pace of interest rate hikes, on Wednesday (15), the European Central Bank raised the interest rate by 0.5%, a decision that came amid the crisis at the European bank Credit Suisse.
However, the U.S. currency lost strength on Thursday (03/16) as news that U.S. bank First Republic Bank, which is facing liquidity problems, will receive $30 billion from a group of U.S. banks, as well as Credit Suisse, which will receive $50 billion Swiss francs from the Swiss National Bank, news that made the market calmer.
As for the quotations of the coffee contract in the NY exchange, the market was pressured yesterday (16) after the data of the monthly variation of the GCA came above the average of the last 5 years for the period, reducing by 159,994 bags from January to February of this year. However, comparing the annual scenario, the stock remains higher than in February/2022 and above the 10-year average.
Certified stocks on the NY exchange have been rising since the last 8th, closing this Thursday at 788,915 60kg bags, but only 475 bags remain pending approval.
MAY/23: Min: 171,05| Max: 182,20 | Last: 176,30
BRL/USD: Min: 5,2124 | Max: 5,3286 | Last: 5,2750
*Data as of completion of this report.
WEATHER
The warm air mass that has been acting in the Southeast region for more than 30 days will gain strength in the coming days, making the formation of summer rains even more difficult.
According to the climate forecast models, this autumn will have temperatures above the historical average due to the weakening of La Niña. Rainfall should also be slightly below the historical average, because the frontal systems that are expected to reach the South of Brazil should not influence the coffee regions. So far there is no frost forecast for the coffee regions.
Rain forecast for the week:
South Minas region: between 10 and 20 mm.
Zona da Mata region: between 5 and 10 mm.
Cerrado region: between 5 and 10 mm.
Alta Mogiana region: between 10 and 20 mm.
Garça region: between 5 and 10 mm.
DOMESTIC MARKET and FOB
With the volatility of the price of coffee on the New York futures market and the US dollar, it was possible to notice a greater number of over-the-counter offers, but with fewer deals. In the FOB, the market was more still, without major adjustments in differentials during the week, since the ideas of seller and buyer are still far apart.
Strictly soft good cup running screen: seller close to R$ 1.070,00
Strictly soft fine cup running screen: seller close to R$ 1.130,00
Rio Minas:
Running screen with 30% low grades close to R$ 950,00
17/18 around R$ 1.080,00
14/16 around R$ 1.040,00
600 defects: close to R$ 970,00;
LOGISTICS
As of March 12, Brazilian coffee bean exports in March reached 809,017 60-kilo bags, with revenues reaching US$ 177.892 million (daily average of US$ 22.236 million, considering 8 working days).
The average daily revenue obtained so far is 40.6% lower when compared to the daily average of March 2022. The average daily volume shipped is 34.2% lower than that of March 2022, which registered 153,775 average daily bags. The average price, in turn, fell 9.7%. The data are from the Secretariat of Foreign Trade (Secex).
Some shipowners again showed little availability of food grade containers. Some schedules needed to be rescheduled or even canceled. There is no significant restriction on ships leaving in the next weeks.
Atlantica Coffee Team
Disclaimer:
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.