KCNY AND CURRENCY
The coffee market continues to be extremely volatile. During the week, coffee prices on the New York Mercantile Exchange for the September/24 expiration date fluctuated by 3075 points, registering a low of 221 on Monday (05) and a high of 251.75 on Thursday (08), ending the week at 234.05. As the start of the September/24 delivery period approaches, on the 22nd, spread trading and U4 x Z4 rollovers intensify. On Monday (05) there were 101,648 lots open in September and this Friday the week ended with 65,464 lots, with the December/24 expiry now the most liquid with 86,349 lots open. Weather uncertainties and concerns about the climate in the world’s main coffee producers, for both the arabica and robusta varieties, were crucial factors in the week’s prices.
Prices for the September/24 expiry date since 01/01/24. Source: Barchart.
On the foreign exchange front, the dollar opened Monday at a high level, but lost strength over the course of the week, being quoted at between R$5.4913 and R$5.8547. In the macroeconomic scenario, the interest rate cuts projected for the US economy should help strengthen the real given the high Selic rate, bringing foreign currency flows into the country.
The Commodity Futures Trading Commission (CFTC) released this Friday (09) a report on the position of Traders in the market for the week ended Tuesday (06), who reduced their net long balance for the fourth week in a row by 1,689 lots, showing a long balance of 39,881 lots, compared to the previous balance of 41,570 lots on 30/07.
Certified stocks ended this Friday (09) totaling 828,509 60 kg bags, with 49,883 bags pending approval. A year ago, stocks totaled 525,917 bags, representing an increase of 302,592 bags over the period.
SEPTEMBER/24: Min: 221.00 | Max: 251.75 | Last: 234.05
BRL/USD: Min: 5.4913 | Max: 5.8547 | Last: 5.5145
*Data as of the completion of this report
WEATHER
The cold front that is passing along the coast of the Southeast is expected to organize light rainfall on Saturday and Sunday in the Zona da Mata and South Minas regions.
The frontal system arrives with little intensity, but the polar air mass that is coming in behind it should cause temperatures to drop over the next few days in all coffee-growing regions. In addition, climate forecast models show that the month of August will be dry and with temperatures slightly above average in the coffee-growing areas.
Rain forecast for the week:
South Minas region: light rainfall between 10 and 15 mm
Zona da Mata region: light showers between 5 and 10 mm
Cerrado, Alta Mogiana and Garça regions: no rain forecast
DOMESTIC MARKET AND FOB
On the domestic market, prices remain firm and on the rise compared to the same period in previous years, resulting in good opportunities for sellers and producers, while on the buying side negotiations are increasingly on an as-needed basis. With coffee prices and the dollar extremely volatile during the week, sellers’ bases were adjusted. On the FOB market, there was only a few trades this week, with firm differentials on the part of sellers, who are mainly concerned with deliveries of large beans as well as the new requirements for shipments to Europe, while buyers’ expectations are different from the offerings they find, hindering the flow of business.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 1,420.00
- Strictly soft fine cup running screen around R$ 1,480.00
- Rio Minas running screen around R$ 1,200.00
- 600 defects was quoted at R$ 1,280.00
LOGISTICS
No schedules were canceled due to a lack of food grade containers, but some rescheduling was necessary due to delays in the release of equipment. Changes to deadlines and gate openings at port terminals continue to be a common factor in the export routine.
- Brazilian ports reached a record in the handling of containerized cargo in the first half of 2024, totaling 73.3 million tons, an increase of 22.72% compared to the same period in 2023, according to data from the Statistical Panel of the National Waterway Transport Agency (Antaq). (Source: A Tribuna)
- The Santos Port Authority (APS) and the Federal Highway Police (PRF) have begun joint action to track and secure the flow of trucks heading to the Port of Santos, as announced in a Technical Cooperation Agreement (ACT) signed on July 24. This agreement provides for the sharing of information and systems to improve mobility, combat traffic violence, tackle crime and allow trucks to be tracked from their origin to the Santos port complex. (Source: Santa Portal)