KCNY and Currency
Coffee prices on the New York Stock Exchange rose sharply this week. With a volatility of 2630 points, the market started Monday (01) at a low of 187.70 and reached a high of 214 this Friday (05) for the May maturity. We’re in the transition from the May to the July expiry and we’re seeing more volume in July, both with very high liquidity.
Arabica prices continue to be boosted by the rise in robusta prices, due to limited supplies in Vietnam and Indonesia, the first and third largest producers of the variety, respectively. Technical factors are helping to sustain arabica above the resistance of 200 cents per pound and the May/24 options expiration is also an important factor in the rise, where funds are possibly long on calls between 200 and 215, boosting prices. In foreign exchange, the dollar remained above R$5.00, with a low of R$5.0042 and a high of R$5.0913.
The Commodity Futures Trading Commission (CFTC) is due to release this Friday (05) the report on the positioning of Traders in the market for the week ended Tuesday (02). Last week, the report showed an increase of 5,815 lots bought in the week ended March 26, totaling 34,284 lots vs. 28,469 in the previous release.
Certified stocks exceeded 600,000 bags and closed Friday (05) at 613,462 60kg bags, of which more than 311,000 were of Brazilian origin. There are still 73,114 bags pending approval.
MAY/24: Min: 187.70 | Max: 214.00 | Last: 212.50
BRL/USD: Min: 5.0042 | Max: 5.0913 | Last: 5.0647
*Data as of the completion of this report
WEATHER
As no cold air mass has yet arrived this fall, and as cloud cover decreases, temperatures are expected to rise slightly over the next few days in all coffee-growing regions. The heat combined with the high humidity could organize isolated afternoon showers in all regions.
Meteorological models show that the rainy season is not yet over in the Southeast of Brazil, and the cold front due to arrive on the 12th is expected to bring moderate rainfall between the 12th and 17th in all coffee-growing regions.
Rain forecast for the week:
South Minas region: between 15 and 20 mm.
Zona da Mata region: between 15 and 20 mm.
Cerrado region: between 15 and 20 mm.
Alta Mogiana region: between 20 and 30 mm.
Garça region: between 20 and 30 mm.
DOMESTIC MARKET and FOB
The physical market followed the strong rise in NY and the strengthening of the dollar. With arabica’s gains on the NY stock exchange, the domestic market was very busy, with much higher demands from sellers, even though exporters maintained their differential bases. On the FOB, there were many deals reported during the week. In the short term, differentials remained at replacement levels, but for new crop shipments sellers were encouraged to sell at slightly wider differentials. Regarding Rio Minas quality, supply remains short and demand for low-grade arabica remains strong.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller around BRL 1,120.00
Strictly soft fine cup running screen: seller around BRL 1,150.00
Rio Minas: Running screen with 25% low grades around BRL 1,010.00 with few sellers;
600 defects: around BRL 960.00 with high demand;
LOGISTICS
- The Santos Port Authority (APS) will convene shipowners, terminals and coffee exporters to discuss logistics solutions aimed at improving the export process through the Port of Santos. The decision was taken by the president of APS, Anderson Pomini, in a meeting with the technical director of Cecafé, Eduardo Heron. The information is from the A Tribuna news portal.
Empties terminals in the ports of Rio de Janeiro and Santos still have a low stock of containers and some schedules have been canceled for this reason. Some destinations in Europe are already restricting new ship bookings until the beginning of May.
We continue to face ship delays in both ports, as well as omissions in the port of Rio de Janeiro.
Atlantica Coffee Team
Disclaimer:
This analysis report aims only to provide information about the coffee market, based on internal and public sources, valid at the time of its dissemination. It does not aim to guide recipients in making any decisions, which are therefore solely the responsibility of the recipient. Atlantica Coffee is exempt from any liability arising from direct or indirect losses.