KCNY and Currency
Coffee prices on the New York Stock Exchange worked between 183.50 and 195.75 cents per pound on the March/24 expiration date, still the most liquid one, with an oscillation of 1225 points on the week. Robusta coffee prices on the London Stock Exchange hit an all-time high this week due to the conflicts in the Red Sea, which are hampering the logistics of the main producing countries of the variety and could lead to a shortage of supply, making the market cautious.
This movement in robusta also has an impact on arabica prices, offsetting the positive data so far from the rains that have been occurring in January in Brazil. With NY ICE’s movements during the week, the H4xK4 spread worked between a low of 2.70 and a high of 6.50. On the currency exchange, the dollar fluctuated between R$4.9024 and R$5.0019.
The Commodity Futures Trading Commission (CFTC) released on Friday (19) a report on traders’ positions in the New York coffee market for the week ended Tuesday (16). Investment funds increased their long position to 29,253 lots, against a previous balance of 25,179.
Certified stocks of coffee on the NY ICE closed Thursday (25) at 254,336 60-kg bags. There are currently 65,278 bags of coffee awaiting approval, of which 41,640 are of Brazilian origin.
On Wednesday 24, the European Coffee Federation released a report on coffee stocks in Europe on December 31, 2023, which totaled 437,059 tons, including robusta and arabica, compared to 771,330 tons in the same period in 2022, representing a drop of 334,271 tons in one year.
MARCH/24: Min: 183.50 | Max: 195.75 | Last: 193.85
BRL/USD: Min: 4.9024 | Max: 5.0019 | Last: 4.9140
*Data up to the finalization of this report
WEATHER
The cold front that arrived in the Southeast of Brazil on the 19th is still stationary between the states of Minas Gerais and Bahia. The South Atlantic Convergence Zone (SACZ) has formed, and heavy rain has been falling in the northern regions of Espírito Santo and southern Bahia.
From Monday the SACZ will weaken, and weather models show the presence of a new cold front on the coast of the Southeast region, which should organize rainfall in the regions of Garça, South Minas and Mogiana.
Rain forecast for the week:
South Minas region: between 30 and 40 mm.
Zona da Mata region: between 10 and 20 mm.
Cerrado region: between 20 and 30 mm.
Alta Mogiana region: between 30 and 40 mm.
Garça region: between 30 and 40 mm.
DOMESTIC MARKET and FOB
There are plenty of offers on the domestic market, but sellers’ requests and buyers’ bases are far apart. Very few deals are reported on the basis that the seller has been asking for; the remaining deals take place according to requirements and market and dollar movements. During the week, the volume of coffee futures traded was very low, with little demand from producers. On the FOB, the Rio Minas differential narrowed, and some group 1 deals were reported.
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$ 880.00
600 defects: close to R$ 850.00
LOGISTICS
According to A Tribuna, global shipping prices continue to rise as attacks on cargo ships in and around the Red Sea continue. The interruptions are at a key point for ships passing through the Suez Canal creating problems in supply chains in Europe and the United States, delaying shipments and increasing transportation costs.
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.