KCNY and Currency
Coffee prices on the New York Stock Exchange worked between 179.00 and 187.95 cents per pound on the March/24 expiration date, still the most liquid one, with a oscillation of 895 points over the week. The market continues to keep an eye on the weather in coffee-growing regions, which remains favorable at the start of the year. The maritime routes that pass through the Red Sea and the impact of the conflict in the region on freight rates are also important in the coffee scenario, as well as other commodities.
In terms of exchange rates, the dollar fluctuated between R$4.8314 and R$4.9090 and the real appreciated against the dollar. The US Consumer Price Index (CPI) was released on Thursday (11) and showed an increase of 0.3% in December, closing the year 2023 at 3.4%. As a result, the market is beginning to reflect expectations about the direction of the US interest rate for 2024, given that this inflation figure closed 2023 slightly higher than expected.
On Friday (05), the Commodity Futures Trading Commission (CFTC) released a report on the position of traders in the New York coffee market for the week ended Tuesday (02). Investment funds increased their long position to 22,556 lots, against a previous balance of 22,138.
Certified stocks of coffee on the NY ICE closed Thursday (11) at 258,066 60 kg bags. There are currently 48,000 bags of coffee awaiting approval, of which 33,780 are of Brazilian origin.
MARCH/24: Min: 179.00 | Max: 187.95 | Last: 180.25
BRL/USD: Min: 4.8314 | Max: 4.9090 | Last: 4.8575
*Data up to the finalization of this report
WEATHER
The cold front that passes along the coast of the Southeast of Brazil between Friday and Saturday is expected to cause moderate rainfall in the regions of Garça, Mogiana and South Minas.
The forecast for next week is for a mass of warm air to act in all the coffee-growing regions, with the possibility of isolated showers in Garça, Mogiana, South Minas, Cerrado and Zona da Mata. No rain is expected in the next few days in the northern regions of Espírito Santo and southern Bahia.
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 10 and 20 mm.
Alta Mogiana region: between 30 and 40 mm.
Garça region: between 30 and 40 mm.
DOMESTIC MARKET and FOB
The domestic market saw a slightly larger movement this week, but the price bases between buyers and sellers are still far apart, so business takes place according to movements on the NY ICE and the dollar. On the other hand, FOB quotations continue to be hectic and for short-term shipments, although the number of deals reported is not as significant. There was a greater appetite from buyers of Rio Minas quality this week, and some outright deals were reported, depending on the exporter’s availability and the movement of coffee prices in NY.
The requests from sellers in the domestic were as below:
Strictly soft good cup running screen: seller close to R$ 980.00
Strictly soft fine cup running screen: seller close to R$ 1,030.00
Rio Minas: Running screen with 25% low grades close to R$ 850.00
600 defects: close to R$ 830.00
LOGISTICS
- Global container rates have soared in the last two weeks due to tensions in the Red Sea. Attacks on vessels in the region have resulted in detour from longer routes, interrupting transportation from Asia to Europe and the East Coast of the United States, impacting coffee shipments from the main Asian exporters. The information was reported by the Globo Rural news portal.
In recent weeks, the heavy traffic around the Port of Santos has had a direct impact on some shipments, which could not be delivered to the port terminal by the deadline. In addition to the high flow of cargo vehicles, the return of the end-of-year festivities and vacations were also pointed out as damaging factors.
Empty container terminals are operating with satisfactory stocks and ships due to leave in 4 to 6 weeks are not 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.