Brazilian growers sold 40% of 20/21 crop
The fall in prices last June, of course, weakened negotiations in the domestic physical market. However, even with a slower selling rhythm, commercialization continues accelerated. Growers knew how to take advantage of price rebounds to accelerate their forward positions (through barter and, especially, future sales). With that, they managed to set their commercial flow very well.
There were many opportunities for sellers. The rebound on ICE Futures U.S. in December last year, and a new, lower one in early March this year. Then, the dollar’s escalation, which went from late March to May. With that, growers arrived at the beginning of the 20/21 business season very well sold (not only in terms of prices but also in percentage sold of the crop). Now, in the face of the price decline, growers try to manage their cash needs, without the natural selling pressure during the crop arrival.
Therefore, the market has lost some pace. Some agents are trying to bring forward the delivery of future sales, even with a good demand from trading companies (without negative spread). This helps growers to get cash in advance, reducing their need to go to the market. Only those most in need of money show up. Yet, they seek to take advantage of rallies to unlock their business. In general, the commercial flow has lost some intensity.
The monthly survey by SAFRAS indicates that, until July 7, the commitment of the 2020/21 crop by growers was at 40% of production. The sales flow remains much faster compared to the same period last year, when it reached 34% of the expected output. It is also well above the average of the last 5 years for the period, when 30% were sold. Arabica stands out with 42% of production negotiated, against 33% in the same period last year and 29% on average. Conillon sales gained intensity with the advance of the harvest and reached 36% of production, against 36% in 2019 and 34% on average.
Harvest advances well and reaches 56% of 2020/21 crop in Brazil
The harvest continues at a good pace, taking advantage of the favorable climate. The harvest progressed 8% over the previous week, even so, it remains very late, especially in comparison with the same period last year. Highlight on the quality of the cup in the case of arabica. And watch out for signs of conillon crop losses in Espírito Santo crop.
The weekly survey by SAFRAS indicates that, until July 7, the harvest of the 2020/21 season in Brazil reached 56% of the production estimated at 68.10 million 60-kg bags. Thus, 38.05 million bags have already been reaped. The progress is well below the same period last year, when it reached 68% of production, and slightly below the 5-year average of 58% for the period.
In the case of arabica, the harvest is 46% complete, against 60% at the same time last year, and 48% on the average of the last 5 years. The quality of the cup and the bean size are positive highlights in several regions, confirming, until now, the profile of record production and excellent quality.
The conillon harvest is 79% complete. Despite this, it remains well below the same period last year (84%) and also below the five-year average (86%). The COVID-19 protocol helps explain the progress of the work. The crop in Espírito Santo has performed below expectations, which should lead to a downward revision in the crop size. However, the crop in Bahia and Rondônia has been better than expected and is likely to offset losses in Espírito Santo.