KCNY and Currency
This week coffee was quoted on the New York Stock Exchange at between 220.25 and 234.50, with volatility of 1425 points in the week on the July/24 expiration date, the most liquid with more than 120,000 lots open, showing a reverse movement compared to the bullish movements seen in previous weeks. The market continues to monitor the weather in the main coffee producing countries, Brazil and Vietnam, with expectations for the next crop and, especially for robusta, an imbalance between world supply and demand.
Prices for the July/24 maturity since 01/01/24. Source: Barchart.
On the exchange rate, the dollar was quoted between a low of R$5.1090 and a high of R$5.2180, and with its devaluation ended the week at R$5.1156. Data on US GDP was released during the week, indicating growth of 1.6% in the first quarter of 2024 against a market projection of 2.5%.
Last Friday (19), the Commodity Futures Trading Commission (CFTC) released its report on traders’ positions in the market for the week ended Tuesday (16), which showed an increase of 4,883 lots bought, totaling a net balance of 53,433 lots against a previous balance of 48,550. This Friday (26) the report with the data for the close of last Tuesday (23) is due to be released.
Certified stocks continue to rise and closed this Friday (26) at 656,657 60kg bags, with 56,204 bags pending approval. This volume represents an increase of 71,278 bags over the last month.
JULY/24: Min: 220.25 | Max: 234.50 | Last: 224.00
BRL/USD: Min: 5.1090 | Max: 5.2180 | Last: 5.1156
*Data as of the completion of this report
WEATHER
A new heatwave is forecast for the next few days in all coffee-growing regions. A mass of hot air will form between Paraguay and Bolivia, spreading to the states of São Paulo and Minas Gerais.
In Garça, the temperature is expected to exceed the average by 5°C, while in South Minas, Mogiana and Cerrado, an increase of 3°C above average is expected. In the Zona da Mata, an increase of 2°C compared to the historical average is expected.
There is no rain forecast for the next few days, with sun predominating for most of the period in the coffee-growing areas.
DOMESTIC MARKET and FOB
On the domestic market, producers remain cautious, but there was a lot of negotiation between traders, who hedged their positions in line with movements in NY and the dollar. Buyers have passed on the drops in their bases, but sellers remain firm and have not lowered their prices. On the FOB, the market continues with few deals and a lot of expectation for the 24/25 crop, with sellers cautious and buyers hoping for better differentials as the harvest approaches. Regarding Rio Minas, the market is still stuck and for low-grade arabica it remains extremely competitive, with fewer and fewer offers for shipments in the short term.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller around BRL 1,300.00
Strictly soft fine cup running screen: seller around BRL 1,340.00
Rio Minas: Running screen with 25% low grades around BRL 1,160.00 with few sellers;
600 defects: around BRL 1,200.00
LOGISTICS
- Representatives of the Brazilian Coffee Exporters Council (Cecafé), together with agribusiness organizations and port users, took part in a meeting of the Positive Agenda of the National Waterway Transport Agency (ANTAQ) in Brasilia (DF) on April 18. The meeting was held to discuss the persistent delays to ship exports, which have led to high detention costs and additional storage for shipments. Eduardo Heron, Cecafé’s technical director, highlighted the challenges arising from these delays and their impact on logistical planning and port costs, focusing on the indicators for the Port of Santos (SP), the main exporter of the product. (Source: Portal Notícias Agrícolas)
Low stocks of food grade containers have once again hampered schedules. We also warned of operational restrictions and ships not calling at the port of Rio de Janeiro, causing cargo cuts and delays in shipments.
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.