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Ordem Mínima
+55 31 98258-7114
Av. Princesa do Sul, 1885 | B. Rezende,
Varginha, MG, Brazil | ZC: 37062-447
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Weekly report – Brazilian Coffee Market – December 09th ~ 13th, 2024

by Dec 13, 2024Market report0 comments

KCNY AND CURRENCY

During this week, volatility remained evident, with a range of 3525 points for the period. On Tuesday (10), the market experienced severe stress following the publication of figures for the 25/26 crop, reaching a new all-time high of $348.35 cents/lb. 

Despite this record high, prices corrected on the same day, settling at $334.15 cents/lb. On Wednesday (11), there was a drop of over 4%, adjusting to $320.2 cents/lb, continuing corrections due to overbought market indicators, and closed the week on Friday (13) at $319.50 cents/lb. 

Prices for the March/25 expiry date since 01/01/24. Source: Barchart. 

In terms of the dollar, the week began with news that China signaled a looser monetary policy stance. Brazilian fiscal uncertainties remain in focus, and domestically, the progress of the fiscal package in the Chamber of Deputies was stalled by an impasse over the payment of parliamentary amendments and budget rapporteur amendments. Additionally, this week’s Copom meetings, the last of the year, were highly anticipated. An interest rate hike was already expected, but the question was how much. On Wednesday, Copom announced a 1 percentage point increase in the Selic rate, raising it to 12.25% per year. Until the necessary fiscal adjustments are made, the real is likely to remain under pressure. 

Certified stocks closed this Friday (13) at 940,426 60-kg bags, just over 30,000 bags higher than last Friday, with an additional 94,495 bags pending approval. 

 
March/25: Min: 313.10 | Max: 348.35 | Last: 319.50 
BRL/USD: Min: 5.8685 | Max: 6.0903 | Last: 6.0393 

*Data up to the finalization of this report  


WEATHER

The cold front that moved through the Southeast region this week brought rainfall to all coffee-growing areas. A new cold front is expected to reach São Paulo state on Saturday, likely causing moderate rain in all regions over the coming days. 

Weather forecast models indicate that two additional cold fronts are expected to reach the Southeast by the end of the year, with accumulated precipitation projected to be slightly above the historical monthly average. 

Rain forecast for the week:  

South Minas region: between 40 and 50 mm.  

Zona da Mata region: between 40 and 50 mm. 

Cerrado region: between 40 and 50 mm. 

Alta Mogiana region: between 30 and 40 mm. 

Garça region: between 30 and 40 mm. 


DOMESTIC MARKET AND FOB

The domestic and FOB markets remain stagnant, affected by intense fluctuations and instability in NY ICE. In the domestic market, in addition to price volatility and high price expectations, the fiscal year-end also contributes to reduced activity, making it harder to close new deals. 

The requests from sellers in the domestic are as below: 

  • Strictly soft good cup running screen around R$ 2,200.00 
  • Strictly soft fine cup running screen up to R$ 2,350.00 
  • Rio Minas running screen around R$ 1,900.00 
  • 600 defects around R$ 2,100.00 

LOGISTICS

For another week, operations faced significant impacts due to container shortages and persistent delays in ship schedules, further exacerbating logistical challenges. 

  • The Santos Port Authority (APS) announced that operations at the Port of Santos will be suspended during the holiday season on the following dates: from 7 PM on December 24th to 7 AM on December 25th, and from 7 PM on December 31st to 7 AM on January 1st, resuming normal activities after each period. 
  • Brazil set a record by exporting 46.4 million coffee bags in 2024, overcoming logistical challenges. According to CECAFÉ, November saw 4.662 million bags shipped, a 5.4% increase compared to the same month in 2023. 

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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.