KCNY and currency
The coffee market continues to experience volatility. Throughout the week, prices ranged from 228.55 to 244.55, displaying a fluctuation of 1600 points for the September 2024 maturity, which remains the most liquid. The week concluded with prices decreasing to 230.25. From a fundamental perspective, there are ongoing concerns about the global coffee supply. Estimates for the 2024/2025 harvest have been adjusted downward by several research sources, and there are worries about the upcoming Vietnamese harvest, as it is the largest robusta producer. Additionally, funds and speculators have reduced their long positions over the course of the week.
Prices for the September/24 maturity since 01/01/24. Source: Barchart.
In the foreign exchange market, the dollar fluctuated between R$5.5349 and R$5.6915, with the real remaining weak against the dollar due to domestic fiscal instability. This is despite uncertainties surrounding the US economy, influenced by the current election dynamics and other economic data.
The Commodity Futures Trading Commission (CFTC) released a report on Friday, the 26th, detailing trader positions for the week ending Tuesday, the 23rd. Traders reduced their net long positions for the second consecutive week by 4,131 lots, resulting in a net long balance of 43,725 lots compared to 47,856 lots on July 16th.
Certified stocks concluded on Friday, the 26th, at 814,801 bags of 60 kg each, showing a slight increase over the past month. Currently, 33,355 bags are pending approval.
SEPTEMBER/24: Min: 228,55 | Max: 244,55 | Last: 230,25
BRL/USD: Min: 5,5349 | Max: 5,6915 | Last: 5,6615
*Data as of the completion of this report
WEATHER
After more than 90 days without rain in almost all coffee-growing regions, the cold front arriving in the Southeast on August 30 could cause light rain.
The cold front will pass along the coast of the Southeast and should mainly influence weather conditions in the southern regions and the Zona da Mata. Temperatures are not expected to drop sharply, as the polar air mass accompanying the cold front is expected to move towards the Atlantic Ocean.
Rain forecast for the week:
Southern Minas region: between 10 and 20 mm.
Zona da Mata region: between 10 and 20 mm.
Cerrado region: No rain forecast
Alta Mogiana region: between 5 and 10mm.
Garça region: between 5 and 10mm.
DOMESTIC MARKET and FOB
Prices on the domestic market remain firm, despite the devaluation of the NY ICE, given the high dollar. A few trades were reported, depending on the opportunity. On the FOB market, the differentials continue to widen between 17/18 and MTGB, against a backdrop of occasional demand.
On the domestic market, sellers’ demands are as follows:
– Strictly soft good cup running screen around R$1,400.00;
– Strictly soft fine cup running screen around R$1,460.00;
– Rio Minas around R$1,150.00;
– 600 defects around R$1,280.00;
LOGISTICS
Most shipping companies are experiencing low container stocks, with Hapag-Lloyd facing the most significant challenges. We would like to highlight the limited space available on ships departing in August and early September. Additionally, some companies have announced Peak Season Surcharges for certain destinations, reaching up to $2,000 per container.