KCNY AND CURRENCY
Coffee prices on the New York Stock Exchange continue to be volatile and bullish. After six sessions of gains, the market closed lower on Thursday (22) but returned to gains on Friday (23). During the week, the low for December/24 was 241.00 cents per pound and the high 253.30, closing at 247.30, with a fluctuation of 1230 points.
Prices for the December/24 expiry date since 01/01/24. Source: Barchart.
In foreign exchange, the dollar fluctuated a lot and was quoted at between R$5.3765 and R$5.5954. The real had been doing well against the dollar in relation to other emerging currencies, but discomfort with the Brazilian Central Bank and US data helped the currency lose strength against the dollar.
The Commodity Futures Trading Commission (CFTC) released this Friday (23) the Traders’ Market Position Report for the week ended Tuesday (20), reporting the reversal of position reductions of five weeks in a row, increasing its long balance by 4,514 lots, presenting a long balance of 43,474 lots, versus the previous balance of 38,960 lots on August 13.
Certified stocks ended this Friday (23rd) totaling 844,145 60 kg bags, with 28,585 bags still pending approval. Brazil is currently the origin with the largest volume of certified coffees, accounting for over 48% of stocks, followed by Honduras with 13.67%, Nicaragua with 13.31% and Peru with 10%.
December/24: Min: 241.00 | Max: 253.30 | Last: 247.30
BRL/USD: Min: 5.3765 | Max: 5.5954 | Last: 5.4831
*Data as of the completion of this report
WEATHER
A new cold front, formed in southern Brazil, is expected to hit some coffee-growing regions this Saturday. Over the weekend, it will move into the state of São Paulo and continue along the coast of the Southeast.
There is a possibility of light rain in South Minas, Zona da Mata, Mogiana and Garça. The polar air mass that accompanies the cold front will cause a slight drop in maximum temperatures in some regions, but no frost is forecast.
Rain forecast for the week:
South Minas region: between 5 and 10 mm.
Zona da Mata region: between 5 and 10 mm.
Cerrado region: No rain forecast
Alta Mogiana region: between 1 and 5 mm.
Garça region: between 1 and 5 mm.
DOMESTIC MARKET AND FOB
With the strong rise in coffee prices on the NY ICE and the fluctuations in the dollar, the domestic market is seeing many offers at historically high prices for this period. Sellers keep on feeling that the product should be worth more and they often want to wait for a better price, while buyers wait until the last moment to cover their positions. For the FOB market, demand remains cautious. There is a significant widening of the differentials between big beans and MTGB, even though some buyers’ expectations are far removed from the offers. Factors such as logistical difficulties and delays in warehouse machining have made short-term shipments more difficult. As for Rio Minas, restocking on the domestic market didn’t rise as much as for strictly soft coffees, opening up the differentials a little and improving offers, although flat prices were above buyers’ expectations, and some deals were reported.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 1,450.00
- Strictly soft fine cup running screen around R$ 1,500.00
- Rio Minas running screen between R$ 1,170.00 and R$ 1,200.00
- 600 defects was quoted at R$ 1,330.00
LOGISTICS
The short supply of food grade equipment once again hampered exports and some schedules were canceled. MSC was the maritime operator with the most restrictions. The allocation scenario for ships leaving at the end of August, September and beginning of October is also increasingly critical for the main destinations in Europe and North America.
- In July, 60% of ships carrying coffee for export had to deal with schedule changes and delays at Brazil’s main ports, involving 167 out of 277 vessels. The Port of Santos (SP) recorded the longest waiting times, up to 55 days, and the highest rate of delays, affecting 77% of container ships. These figures are from the Detention Zero Bulletin (DTZ), produced by ElloX in partnership with Cecafé.