KCNY and Currency
Coffee prices on the New York Stock Exchange worked between 176.15 and 194.50 cents per pound in March/24, a significant oscillation of 1835 points in the week, working at the highest levels in the last 8 months. The outlook for the 24/25 crop, the weather in the producing regions and the supply of global coffee in the short term are important factors behind this movement.
On the exchange rate, the quotes for the week were between R$ 4.8742 and R$ 4.9766. The US Central Bank (FED) kept interest rates at between 5.25% and 5.50%, but showed that there could be cuts in 2024. On the domestic front, COPOM cut the Selic interest rate by half a percentage point, to 11.75%, and signaled that easing will continue at the start of 2024.
The Commodity Futures Trading Commission (CFTC) is expected to release on Friday (15) a report on trader positioning in the New York coffee market for the week ended on Tuesday (12). In the latest report, investment funds increased their long position to 16,482 lots on December 5, compared to 13,450 lots on November 28.
Cacafé released its November/23 exports report, which totaled 4,328,910 60 kg bags, up 15.4% on the same period last year. Of these, 855,879 bags were robusta.
Certified stocks of coffee on the NY ICE closed Thursday (14) at 242,399 bags of 60 kgs. There are currently 26,880 bags pending approval.
MARCH/24: Min: 176.15 | Max: 194.50 | Last: 189.65
BRL/USD: Min: 4.8742 | Max: 4.9766 | Last: 4.9398
*Data up to the finalization of this report
WEATHER
The first half of December was marked by the presence of two cold fronts that passed along the coast of the Southeast region of Brazil, which organized isolated rain showers in the coffee-growing regions.
The following chart shows the rainfall observed in the first fortnight compared to the historical average for the month of December:
| Observed rainfall | Average monthly rainfall | Percentage | |
| Garça | 26 mm | 219 mm | 12 |
| Mogiana | 44 mm | 286 mm | 15 |
| South Minas | 189 mm | 260 mm | 73 |
| Zona da Mata | 63 mm | 292 mm | 21 |
| Cerrado | 79 mm | 278 mm | 28 |
Rain forecast for the week:
South Minas region: between 60 and 70 mm.
Zona da Mata region: between 40 and 50 mm.
Cerrado region: between 40 and 50 mm.
Alta Mogiana region: between 60 and 70 mm.
Garça region: between 30 and 40 mm.
DOMESTIC MARKET and FOB
On the domestic market, activity has been reduced due to the end-of-year period, when producers usually have fewer offers. The offers that have been seen are still far from the exporters’ bases and few deals have been reported, depending on need. On the FOB, it’s possible to see some orders for shipment in the short term, for January and February, but no major demand.
The requests from sellers in the domestic were as below:
Strictly soft good cup running screen: seller close to R$ 1,030.00
Strictly soft fine cup running screen: seller close to R$ 1,000.00
Rio Minas: Running screen with 25% low grades close to R$ 850.00
600 defects: close to R$ 810.00
LOGISTICS
- DP World, established on the left bank of the Port of Santos a decade ago, is focusing its investments on infrastructure, with an investment of R$200 million. The focus is on expansion and modernization to increase annual container handling capacity from 1.2 million to 1.4 million TEU. The works include extending the quay from 1,100 meters to 1,290 meters, with an additional 150 meters on the west side and 40 meters on the east. Projections indicate that the work will be completed in 2024, according to information published on the A Tribuna portal.
Ships departing in 2023 have practically run out of available allocations. At this point, it is important that negotiations on rates and conditions for the 1st quarter of 2024 are already concluded, avoiding delays.
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.