KCNY and Currency
The quotations of coffee in the New York Stock Exchange had volatility of 810 points in the week, with both the maximum and minimum of the week in the trading session of Thursday (06). The most liquid maturity, September/23, reached its low of 155.80 cents per pound, even though the day’s close was above 160 cents. Experts at Stonex believe that if there are no surprises with the weather, coffee prices will be under pressure in the current quarter as coffee supply continues to increase, driven by Brazilian production as the harvest progresses.
In the exchange rate, the dollar gained some strength at the beginning of the week mainly due to data from the U.S. economy, which reinforces bets on an increase in interest rates by the FED (U.S. Federal Reserve). Payroll data released on Thursday (06) indicated that the U.S. created 209,000 jobs in June, slightly below expectations, and this reflected in lower quotations on Friday (07).
NY ICE certified coffee stocks closed Thursday (06) at 545,615 60kg bags, showing little change in total volume for the week compared to last week. At the moment there are 3,034 bags pending approval. A year ago, stocks totaled 813,845 60-kg bags.
SEPTEMBER/23: Min: 155.80 | Max: 163.90 | Last: 160.90
BRL/USD: Min: 4.7880 | Max: 4.9503 | Last: 4.8600
*Data as of the completion of this report.
WEATHER
The polar air mass that acted in the Brazil’s Southeast region in the last few days, and that brought a sharp drop in temperatures during the morning hours, will move away from the continent during the weekend and the forecast is for a slight increase in temperatures.
A new cold front will pass through the southeast region on July 13th; however, it will only pass along the coast, and the polar air mass, which is following it, is not expected to cause a sharp drop in temperatures in the coffee regions.
No rain is forecast for the week.
DOMESTIC MARKET and FOB
With the evolution of the 23/24 harvest, offers in the domestic market continue to increase and there were few variations in the bag prices in Real, maintaining the linearity of differentials according to the movements of NY ICE and the dollar. In the FOB, differentials remain more stabilized favoring some deals and making buyers more enthusiastic. The volume of negotiations of Rio Minas continues to be significant.
The requests from sellers in the domestic market are as below:
Strictly soft good cup running screen: seller close to R$ 800,00
Strictly soft fine cup running screen: seller close to R$ 850,00
Rio Minas: Running screen with 25% low grades close to R$ 700,00
600 defects: close to R$ 730,00;
LOGISTICS The global demand for maritime transport has increased considerably, resulting in a shortage of space on ships and a lack of availability of specific containers for the transport of foodstuffs, such as those used for coffee. This difficulty has led companies to face delivery delays and seek alternatives to meet coffee transportation needs, such as sharing containers and finding alternative routes.
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.