Physical coffee market backs off, following external negative pressure

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Physical market backs off, following external negative pressure

The physical coffee market remains under pressure, reflecting the weakness in the external benchmark. The dollar, even firm, has moved on the sidelines and, therefore, is no longer sufficient to contain the depreciation of coffee export prices, making the physical price fell again. Good cup is indicated between BRL 505 and 510 a bag in the south of Minas. Besides being distant from BRL 605 a bag in early September, prices are again approaching the level of BRL 500 per bag. Of course, this keeps sellers away and takes liquidity of business.

Fine cup from Cerrado de Minas reaches BRL 540 to 550 per bag. Growers are also quiet, with prices at BRL 630 to 640 in early September. In Mogiana (SP), the idea also ranges between BRL 540 and 550 for fine coffee in the physical market. Forward business with September 2021 is indicated between BRL 550 and 560 for fine cups in Cerrado/Mogiana. The idea for September 2022 ranges from BRL 570 to 580 per bag.

Rio cup in Matas de Minas region ranges from BRL 385 to 390 per bag. The market suffers less, given the volatility of the dollar and ICE futures, but remains without showing strength to react. Internal demand has been rather slow, working on a hand-to-mouth basis. Finally, conillon, which finds support in the good internal flow and lower physical supply (strong export flow and a lower-than-expected crop in Espírito Santo). In Colatina, indications for type 7 at BRL 390 to 395 a bag.