Physical market falls again, following lows on ICE
Physical coffee prices fell again at the beginning of December, pressured by a \weaker dollar and lack of strength on ICE. Good cup from southern Minas is trading at BRL 560 a bag. Albeit far from the level of BRL 595 at the end of November, it still maintains a good advantage in relation to BRL 505 at the end of October. Fine cup from Cerrado and Mogiana is pegged between BRL 595 and 600 per bag. The market still maintains a good advantage over good cup due to the sellers’ defensive stance of holding the best coffees for future sale.
Growers show little interest in setting prices for Brazil’s 2021 crop. Besides the good volume already sold in advance, doubts about production end up helping to empty the market. Good cup ideas range from BRL 585 to 595 for Sep/2021, and from BRL 605 to 615 for Sep/2022. Finer coffee, on the other hand, reaches BRL 610 to 620 for Sep/2021 and BRL 660 to 670 for Sep/2022.
Rio coffee with 20% of defects from Matas de Minas fell from BRL 395 to 400 per bag. Conillon type 7 fell from BRL 390 to 395 in Espírito Santo. These descriptions focus on domestic demand, which, albeit less susceptible to fluctuations in the exchange rate and ICE futures, is likely to work on a hand-to-mouth basis, hindering bullish attacks.