KCNY and Currency
In a post-expiration week of options and holidays in Brazil coffee in NY continues the movement of fall setting new lows and reaching levels before the frost of 2021. Once again, certificates in NEW York set the tone for negotiations, where 28,033 bags were approved, and 584,688 bags are pending approval.
Another important data released in the week was the variation in American inventories (GCA) in -58,321 bags compared to October/22, being above the average variation of 10 years. Funds increase the short position by -4,748 lots and the total final position at -19,339 lots.
In the economic scenario, the optimism seen last week after U.S. inflationary data showed an improvement was slowed by the perception that rising interest rates on the global stage are not so close to being halted.
In the local scenario, the main issue is the transition PEC, which is causing great discomfort concerning the country’s fiscal scenario due to the probable hole in the spending ceiling. During all this, the market is attentive to any talk of the future President Lula who after statements made at COP 27, defended the hole of the spending ceiling to support the social issue, causing a strong devaluation of the stock exchange and local currency.
MARCH/23: Min: 154,05 | Max: 168,40 | Last: 159,40
BRL/USD: Min: 5,2607 | Max: 5,5296 | Last: 5,3470
*Data as of the completion of this report
In the regions of South Minas and Zona da Mata the rainfall is already above the historical average for November. The cold front that acted in recent days was responsible for the heavy rains that occurred in some cities.
A new cold front arrives in Minas Gerais on Tuesday and should bring rain to all coffee regions. The South Atlantic Convergence Zone – SACZ should form and cause moderate rains in Minas Gerais, mainly in the north and northeast regions of the state. Due to the action of the La Niña phenomenon, the climate models are predicting the formation of SACZ also in December and January.
Rain forecast for the week:
South Minas region: between 60 and 70 mm.
Zona da Mata region: between 70 and 80 mm.
Cerrado region: between 50 and 60 mm.
Alta Mogiana region: between 20 and 30 mm.
Garça region: between 10 and 20 mm.
DOMESTIC MARKET and FOB
Over-the-counter deals follow scant and replacement prices continue to rise, making the physical price still resistant to NY’s fall. That is, reality x expectation is still very distant.
Few businesses reported, looking for coffee still for close shipment.
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
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;
Ships with an upcoming departure (4-6 weeks) to major US and European ports are already space-constrained, limiting confirmation of new bookings.
Stocks of food grade containers remain low. Some schedules could not be realized and had to be postponed.
We reiterate the need to send shipping instructions in advance, with more than one choice of carrier, in order to avoid delays.
COVID-19 IN BRAZIL
People who received the first dose: +182.179.554
Fully vaccinated people: +171.682.105
Cases: + 35.009.176 million
Deaths: 688.886 thousand
Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team