KCNY and Currency
The week was positive for the macroeconomic scenario in the USA, as inflation data showed a better-than-expected slowdown in the index. As a result, the dollar abroad lost strength and risk assets were boosted. In addition, China has eased measures against Covid.
However, in Brazil, the favorable external scenario was replaced by the worsening political/fiscal scenario, due to negative local inflation data coming in higher than expected and by speeches of the future president that caused apprehension about the fiscal/economic situation in the country for the coming years.
- Over the week, the stocks of NY “ICE” certificates had a considerable increase, approving more than 60 thousand bags, totaling the final stock at 448,704 bags. The number of pending bags is also high, totaling 363,104 60kg bags;
- Rabobank has released its first estimate for the next crop, estimating an increase of at least 8% over the 22/23 crop to a total of 68 million bags;
- The weather in Brazil has brought concerns about the intensity and scope of the rainstorms, causing damage to several cities of Minas Gerais and São Paulo states;
DECEMBER/22: Min: 162,90 | Max: 177,35 | Last: 171,15
BRL/USD: Min: 5,0453 | Max: 5,4148 | Last: 5,3460
*Data as of completion of this report.
WEATHER
From Monday on, a new cold front arrives in the Southeast region of Brazil and is expected to bring rains during the week in all major Brazilian coffee regions.
The collision between the warm air mass and the cold front could organize thunderstorms in Minas Gerais on Monday and Tuesday. It will be rain with lightning, wind gusts and even hail. In the South Minas and Zona da Mata regions, weather conditions will be favorable for thunderstorms.
Rain forecast for the week:
South Minas region: between 70 and 100 mm.
Zona da Mata region: between 70 and 100 mm.
Cerrado region: between 70 and 100 mm.
Alta Mogiana region: between 50 and 60 mm.
Garça region: between 10 and 20 mm.
DOMESTIC MARKET and FOB
The week was busy with fast shipping demands. Customers are looking for low prices while the replacement does not make it possible to close deals.
On the domestic market, there is a lack of offers at the counter due to the price drop and producers having no interest in doing business.
Strictly soft good cup running screen: seller close to R$ 970,00
Strictly soft fine cup running screen: seller close to R$ 1.020,00
Rio Minas:
17/18: R$ 950,00
15/16: R$ 920,00
Running screen with 30% low grades: close to R$ 850,00
600 defects: close to R$ 830,00;
LOGISTICS
We had no significant impact from lack of containers on the scheduled shipments for this week. Some shipowners still have low stock, which only results in delayed releases.
The low space offered in November and December vessels persists. We reiterate the importance of sending shipping instructions in advance.
COVID-19 IN BRAZIL
People who received the first dose: +182.179.554
Fully vaccinated people: +171.682.105
Cases: +34.928.504
Deaths: 688.659 thousand
Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team