KCNY and currency
The NY “ICE” market maintains a continuous drop during the week repeating movements that reflect risk aversion and the financial outflow of speculators. Fears about the decrease in consumption, the tightening of household budgets and the loss of purchasing power also support the maintenance of the fall. The instability in the exchange rate reflects political tensions within the electoral context.
- As per the report released by the Commodity Futures Trading Commission (CFTC) on October 21, mutual funds and speculators went from a long balance of 23,874 lots to 5,106 lots. A drop of 18,768 lots in seven days;
- The second round of the Brazilian presidential elections takes place next Sunday the 30th;
- The week’s rains and the its forecast for maintenance in the producing regions are in favor of the 23/24 harvest and bring good expectations for the volume of coffee to be produced in the next harvest year;
- During the week, at a meeting of the Central Bank, Copom maintained the Selic rate at 13.75% and in the euro zone the European Central Bank increased interest rates;
- The NY “ICE” certified stock closed Thursday at 385,465 60 kg bags;
- In its report Commodity Markets Outlook, the World Bank estimates a drop of 4.5% in the average prices of agricultural commodities as a reflection of the world recession and the decrease in the flow of circulation in China. For coffee, the bank foresees an average devaluation of 6.8% for the same period.
DECEMBER/22: Min: 171,00 | Max: 194,15 |Last: 171,15
BRL/USD: Min: 5,2083| Max: 5,3925|Last: 5,3390
*Data as of completion of this report.
The cold front that arrives at the beginning of the week should advance across the state of Minas Gerais and cause rains in all regions of the state. The cold front is accompanied by a strong polar air mass, which should cause frost in the South of Brazil, and in the Southeast region only a drop in temperatures due to the occurrence of rain and also due to the presence of cloudiness.
The climate forecast models show that rainfall in the month of November should be slightly above average in all coffee growing regions in Minas Gerais, and below average for the month in the Mogiana and Garça regions.
Rain forecast for the week:
South of Minas region: between 80 and 100 mm.
Zona da Mata region: between 100 and 120 mm.
Cerrado region: between 70 and 90 mm.
Alta Mogiana region: between 50 and 60 mm.
Garça region: between 50 and 60 mm.
DOMESTIC MARKET AND FOB
The reported business on a FOB basis and also in the domestic market were more active this week, until Wednesday.
Strictly soft good cup running screen: seller close to R$ 1.020,00;
Strictly soft fine cup running screen: seller close to R$ 1.060,00;
Running screen with 30% low grades close to R$ 850,00;
17/18: R$ 940,00;
15/16: R$ 900,00;
600 defects: the reported business were around 1.020,00. Later in the week there were offers around R$970,00;
Exporters continue to face many logistical difficulties, mainly lack of allocation in ships with close departure (4 – 6 weeks) and insufficient stock of food standard equipment.
This week, the Council of Brazilian Coffee Exporters (Cecafé) took part in the event “Logistics challenges: current solutions for exporting in containers”, promoted by RMM Advocacia, in Santos (SP), where these issues were debated.
Sending shipping instructions in advance, with more than one carrier option, has still proven to be one of the best alternatives to circumvent this challenging scenario.
COVID-19 IN BRAZIL
People who received the first dose: +181,958,419
Fully vaccinated people: +171,399,397
Cases: + 34,815,258
Deaths: 687,962 mil
Atlantica Coffee Team