KCNY and Currency
Coffee prices on the New York Stock Exchange worked between 175.55 and 187.10 cents per pound on the March/24 expiration date, still the most liquid one, with a oscillation of 1155 points over the week. In terms of fundamentals, expectations for the 24/25 crop remain on the radar and the geopolitical scenario is an important point. In foreign exchange, the dollar fluctuated between R$4.8312 and R$4.9558, where the dollar appreciated throughout the week in an environment of greater risk aversion.
Robusta coffee prices on the London Stock Exchange have risen sharply in recent days due to the conflicts in the Red Sea, making logistics difficult for the variety’s main producing countries and freight prices have risen sharply. As a result, the arbitrage between New York and LONDON narrowed to below -40 LDNH4 x KCH4 and ended the week at around @ -44.
On January 15, Cecafé released its report on Brazilian exports for December/23. During the month, 4,116,007 60kg bags were exported, compared to 3.238 million in the same month of 2022. In 2023, 39.247 million 60kg bags were exported, 0.4% less than the previous year.
On Friday (12), the Commodity Futures Trading Commission (CFTC) released a report on traders’ positions in the New York coffee market for the week ending Tuesday (09). Investment funds increased their long position to 25,179 lots, against a previous balance of 22,556.
Certified stocks of coffee on the NY ICE closed Thursday (18) at 263,810 60 kg bags. There are currently 45,051 bags of coffee awaiting approval, of which 31,540 are of Brazilian origin.
MARCH/24: Min: 175.55 | Max: 187.10 | Last: 185.15
BRL/USD: Min: 4.8312 | Max: 4.9558 | Last: 4.9230
*Data up to the finalization of this report
WEATHER
The cold front arriving this Friday in the state of São Paulo is expected to cause moderate rainfall over the next few days in all coffee-growing regions. There are chances of thunderstorms between Friday and Saturday in the regions of Garça, Mogiana and South Minas.
The South Atlantic Convergence Zone – SACZ is expected to form between January 22 and 30 and position itself over Bahia. Accumulated rainfall of over 150 mm is forecast for the entire state of Bahia.
Rain forecast for the week:
South Minas region: between 50 and 60 mm.
Zona da Mata region: between 40 and 50 mm.
Cerrado region: between 40 and 50 mm.
Alta Mogiana region: between 50 and 60 mm.
Garça region: between 40 and 50 mm.
DOMESTIC MARKET and FOB
There are a good number of offers on the domestic market, but prices are still mismatched between the buying and selling sides, with deals reported as necessary. On the FOB, there are many orders for short-term shipments, with the differentials a little tighter on the selling side.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 980.00
Strictly soft fine cup running screen: seller close to R$ 1,050.00
Rio Minas: Running screen with 25% low grades close to R$ 850.00
600 defects: close to R$ 850.00
LOGISTICS
Conflicts in the Red Sea continue, and rising freight costs and longer shipping times as a result of detours are among the obstacles that the global logistics sector is already experiencing. The information is from the Notícias Agrícolas portal.
Empty container terminals are once again showing low stock and some shipments have been canceled due to lack of equipment. Ships scheduled to leave in the next 4 to 6 weeks are not yet restricted.
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.