KCNY and Currency
Coffee prices on the New York Stock Exchange worked between 151.60 and 157.60 cents per pound on the December/23 expiration date, the most liquid one, totaling a volatility of 600 points for the week. The coffee futures market ended August 6% down. Harvests for the 23/24 crop are almost over, which reduces concerns about the rain forecast for the coming months due to the El Niño effect. The expectation is that they won’t harm coffees that could be drying out in the yard and will favor flowering. Even so, the market is watching the weather with caution.
On the exchange rate, the dollar reflects the global environment of risk aversion. Domestically, there is still a feeling of fiscal risk in Brazil. The Annual Budget Bill for 2024 was submitted last Thursday (31) and proposes to bring the deficit to zero next year, but there is still no spending cut in sight.
On Friday (25), the Commodity Futures Trading Commission (CFTC) released the 08/22 Traders’ Position on the coffee market, which showed that investment funds increased their net short position by 20.3%, totaling 31,318 lots. A new report for Tuesday’s close (29) should be released today.
Certified stocks of coffee on the NY ICE closed Thursday (31) at 484,738 60kg bags, with no bags pending approval. A year ago, stocks totaled 672,585.
The weekend will be a longer in the United States, as Labor Day will be celebrated on Monday (04). There will be no coffee cotations on the NY stock exchange.
DECEMBER/23: Min: 151.60 | Max: 157.60 | Last: 151.90
BRL/USD: Min: 4.8417 | Max: 4.9606 | Last: 4.9364
*Data up to the finalization of this report
WEATHER
The cold front that has passed through the Southeast region of Brazil in recent days has organized rains in all coffee-growing regions. The frontal system dissipated this Thursday in the south of Bahia.
For the next few days, a warm air mass is expected to predominate in the states of São Paulo, Minas Gerais, Espírito Santo and the south of Bahia. The meteorological models show that the climate forecast for the month of September is for rains below the historical average.
No rain is expected in the coffee-growing regions over the next few days.
DOMESTIC MARKET and FOB
The physical coffee market had few trades reported this week. The movements of the NY ICE and the dollar working in opposite directions made sellers more cautious. The bases between producers and exporters remain distant. On the FOB market, demand was more specific and for closer shipments.
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$ 750,00;
600 defects: close to R$ 710,00;
LOGISTICS
- According to the Notícias Agrícolas portal, the Port of Santos reached a significant milestone in July, moving 15.3 million tons of goods, which represents the best ever recorded for the month. This impressive performance is 5.2% higher than the volume recorded in July of the previous year, which was 14.5 million tons.
- Sea freight rates showed a significant reduction in 2023 compared to the previous year, as reported by the A Tribuna portal. After a period of significant price increases during the pandemic, the sea freight market began to stabilize in the middle of last year.
- Also, according to A Tribuna, although the challenges of the market have decreased and the value of freight has stabilized, experts point out that in the second half of 2024 it is still possible that the sector will continue with values above those practiced pre-pandemic.
We reiterate the need to send shipping instructions in advance, as some destinations only have ship availability for the first half of October.
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.