Internal coffee physical market reacts and sustains itself near the top


    The physical market showed a decline on ICE US (lost the 130-cent level) and moved away from the recent highs. The appreciated dollar, even after adjustments, serves as an internal support factor, relieving the pressure coming from the outside. In general, coffee prices in the Brazilian physical market remain close to the top, which encourages sellers.

    The finest cups are currently around BRL 735 to 745 per bag in the physicals. Although still relatively valued, the description lost a little contact with the level of BRL 800 a bag, showing signs of exhaustion of the bullish movement. The market lacks fundamental news.

    Good cup from southern Minas Gerais still sustains the level of BRL 700 a bag, following within a region favorable to sellers. Growers are with an eye on the development of Brazil’s 2021 crop and aware of the ICE and dollar volatility. The indications for business in advance for Brazil’s 2021 and 2022 crops remain within a very attractive level for sellers, indicated between BRL 720/730 for Sep/21 and BRL 740/750 for Sep/22, still above the average reference for the period.

    Rio cup in the Matas de Minas region sustains gains and remains close to the highs, seeking relative appreciation against the best cups. The cheap price in dollars, which must attract foreign demand, coupled with demand by the domestic industry, supports the price of this description. A short supply also helps.

    Finally, conillon type 7 from Espírito Santo, which ended up reacting, stopping, at least momentarily, the bearish movement, which was already taking shape in the market. Albeit concerned with a high dollar and the stimulus to exports, the local industry continues to work on a hand-to-mouth basis, betting on seasonal pressure with the arrival of new conillon to the market.