KCNY and Currency
Coffee prices on the New York Stock Exchange broke through 150 cents per pound during the week on the December/23 expiration date, the most liquid one, reaching the lowest levels in 7 months. The total range for the week was between 147.20 and 158.50 cents per pound, totaling a volatility of 1030 points. The market is coming off the back of 8 straight sessions of declines, pressured by a number of technical and fundamental factors, such as the weather favoring the harvest and the progress of the crop, even though sales of the new crop are not progressing as expected for this time of the year.
On the currency front, the dollar continues to appreciate and the real is losing strength, with China playing an important role in this movement. The country is showing an unstable environment and many economic uncertainties. The government has tried to contain the movement, but the actions are insufficient. Macroeconomic signals have hampered the performance of commodities in general.
Certified coffee stocks on the NY ICE closed Thursday (17) at 514,909 60kg bags, with no bags pending approval. A year ago, stocks totaled 581,342.
SEPTEMBER/23: Min: 147.20 | Max: 158.50 | Last: 148.85
BRL/USD: Min: 4.9117 | Max: 5.0014 | Last: 4.9630
*Data as of the completion of this report.
WEATHER
The cold front arriving in São Paulo on Saturday (19) is expected to cause increased cloudiness during the day and rain from the afternoon onwards in the Garça region. Rain is also expected at night in the Mogiana region.
On Sunday (20) and Monday (21), the cold front is expected to cause showers in some municipalities in the Cerrado and South Minas regions. In the Zona da Mata, the forecast is for partly cloudy weather, with no rain. Sun between clouds in northern Espírito Santo and southern Bahia.
The cold front arrives with low intensity and should dissipate off the coast of Rio de Janeiro from Tuesday.
Rain forecast for the week
South Minas Region: Chances of light rain between 5 and 10 mm.
Zona da Mata region: No rain forecast.
Cerrado region: Chances of light rain between 5 and 10 mm.
Alta Mogiana Region: Chances of light rain between 10 and 15 mm.
Garça Region: Chances of light rain between 10 and 15 mm.
DOMESTIC MARKET and FOB
With the recent falls in coffee prices on the New York Stock Exchange, the domestic market has seen almost no sellers during the week, they are withdrawn and unwilling to sell on the basis of current buyers, leaving the market stuck. On the FOB, few deals were reported, and differentials are narrowing for all qualities.
The requests from sellers in the domestic market are as below:
Strictly soft good cup running screen: seller close to R$ 800,00
Strictly soft fine cup running screen: seller close to R$ 850,00
Rio Minas: Running screen with 25% low grades close to R$ 700,00 but with few sellers
600 defects: close to R$ 710,00;
LOGISTICS
According to the report published by CECAFÉ, total exports of coffees originating in Brazil in the first seven months of 2023, both in terms of quantity and foreign exchange revenue, were down 14.7% in quantity and 20.5% in foreign exchange revenue compared to the same period last year.
The Santos and Itaguaí depots once again showed low stocks of food grade containers. Some schedules have been affected.
Ships due to leave in August for US and European ports are already short of space. We would like to point out the importance of sending Shipping Instructions in advance.
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.