Internal physical coffee market retreats, following ICE and dollar’s swing

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Internal physical market retreats, following ICE and dollar’s swing

Domestic physical prices in reals remain linked to the swing of the dollar. Although the US currency has moved away from historic peaks (it even exchanged hands at BRL 5.7450), it remains over BRL 5.30, which still guarantees attractive prices to sellers. Good cup from southern Minas Gerais ended up moving away from the level of BRL 600 per bag in the physicals, trading between BRL 560 and 565 for a 60-kg bag. The indications for forward business with the new crop range from BRL 550 to 560 for September 2020, and from BRL 570 to 580 for September 2021. Despite the decrease, still above the average price (deflated) reached for the month of September.

Fine cup from Cerrado continues on the rise in the physicals, exchanging hands between BRL 590 and 595 and reaching BRL 610 for extra fine, certified coffee, given the scarce supply. Indications for the new crop fall to BRL 560/570 for September 2020, and BRL 590/600 for delivery and pay in September 2021.

Rio cup is between BRL 380 and 385 in Mata de Minas region, where new coffee begins to emerge with high level of defects. Trades reported with hard cup with 30% to 35% of defects at BRL 470 to 480 a bag. Conillon type 7 from Espírito Santo is exchanging hands between BRL 330 and 335, from both the new and old crops.