KCNY and Currency
Position rollovers on the New York Stock Exchange are coming to an end as the March/24 delivery period approaches, starting next Wednesday (21). As a result, the May/24 expiration date is becoming the most liquid, being quoted between 182.10 and 194.05, with volatility of 1195 points over the week. The H4XK4 spread reached a high of +5.45. Robusta prices on the London Stock Exchange, logistical problems and crop cuts in the main robusta producing countries supported arabica prices in NY.
The dollar was quoted at between R$4.9510 and R$4.9888 during the week, which was shorter in Brazil due to the Carnival holiday. US consumer inflation data came in higher than expected, raising expectations that the start of the interest rate cut cycle in the country may take a little longer.
Investment funds remain long on coffee contracts in NY. On Friday (09), the Commodity Futures Trading Commission (CFTC) released a report on the positioning of traders in the market for the week ended Tuesday (06), in which funds increased their long position to 34,940 lots, against a previous balance of 34,110.
Certified coffee stocks on the NY ICE closed Thursday (15) at 302,462 60 kg bags. There are currently 63,477 bags of coffee awaiting approval, of which 49,642 are of Brazilian origin.
MARCH/24: Min: 182.10 | Max: 194.05 | Last: 186.70
BRL/USD: Min: 4.9510 | Max: 4.9888 | Last: 4.9662
*Data up to the finalization of this report
WEATHER
Rain is forecast for the next few days in all coffee-growing regions. A cold front is acting in the Southeast of Brazil and weather models show a sharp drop in atmospheric pressure off the coast of the region, which should favor the formation of the South Atlantic Convergence Zone – SACZ.
The SACZ creates a river of moisture in the middle levels of the atmosphere between the Amazon state and the Atlantic Ocean, which feeds the cold front with moisture to organize rain clouds. The SACZ should once again be positioned between the states of Minas Gerais and Bahia.
Rain forecast for the week:
South Minas region: between 80 and 90 mm.
Zona da Mata region: between 80 and 90 mm.
Cerrado region: between 80 and 90 mm.
Alta Mogiana region: between 30 and 40 mm.
Garça region: between 20 and 30 mm.
DOMESTIC MARKET and FOB
The week was short on the domestic market due to the Carnival holiday, so trading was a little slower. The market remains well supplied, but the price bases between sellers and buyers are mismatched. On FOB, there are some orders for immediate shipment, but with few sellers. Some deals for distant shipments were reported.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 1,010.00
Strictly soft fine cup running screen: seller close to R$ 1,060.00
Rio Minas: Running screen with 25% low grades close to R$ 900.00
600 defects: close to R$ 900.00
LOGISTICS
- In January 2024, Brazil exported 3.961 million 60-kg bags of coffee, a record for the first month of each year and 39% more than in the same period last year. The information comes from Cecafé (Brazilian Coffee Exporters Council).
- According to information published by the Portos e Navios portal, Maersk warns its customers that the crisis in the Red Sea could extend into the second half of the year. According to the regional president of Maersk North America, the longest transit routes could last until the second and potentially the third quarter.
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.