KCNY and Currency
Coffee prices on the New York market remained above 160 US cents/lb firm for most of the time, breaking this figure in a few moments at the September/23 expiration date. The total range for the week was between 157.90 and 168.30 cents/pound, amounting to a volatility of 1040 points. Switch positions out of the September/23 maturity are intensifying and trading of the September-December/23 spreads agitates the market.
In the exchange rate, the real lost strength in the week, mainly after Wednesday (02), when COPOM, the Monetary Policy Committee, announced the cut of SELIC (basic interest rate) by 0.5%, now reaching 13.25%, which may indicate the reduction of foreign investments in the country. Still, uncertainties about the US economy remain on the agenda. During the week, Fitch (Risk Rating Agency) downgraded the US long-term credit rating, pointing to high and growing government debt, including other factors.
NY ICE certified coffee stocks closed Thursday (04) at 527,942 60kg bags, with no bags pending approval. Honduras is currently the origin that has the most certified coffees, accounting for almost 65%. Brazil is right behind with 30%. A year ago, stocks totaled 695,135 bags.
SEPTEMBER/23: Min: 157.90 | Max: 168.30 | Last: 161.35
BRL/USD: Min: 4.7335 | Max: 4.9218 | Last: 4.8491
*Data as of the completion of this report.
WEATHER
A dry air mass is expected to act in all coffee regions in the coming days, making it difficult for clouds to form that could cause rainfall, causing a drop in relative humidity and a slight rise in temperatures. No cold fronts or significant polar air masses are expected to arrive until the end of August.
There is no rain forecast for the week.
DOMESTIC MARKET and FOB
In the domestic market, although the harvest of the 23/24 crop has exceeded 70% in Arabica and there is a lot of new coffee available, the amount of business reported is still low compared to the historical average of the season. Sellers take advantage of the market’s upward moments and the weakened dollar to increase their bases, which are still far from buyers.
In FOB the week was quiet, with occasional business, where NY ICE movements slowed down Rio Minas negotiations, although demand remains firm.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 820,00
Strictly soft fine cup running screen: seller close to R$ 860,00
Rio Minas: Running screen with 25% low grades close to R$ 750,00
600 defects: close to R$ 720,00;
LOGISTICS
According to the Informativo dos Portos portal, the Port of Santos registered a record in cargo handling in the first half of the year, with 81 million tons. Statistically, the result is practically the same as in 2022.
In June, there was a significant increase in the soy complex, growing 34.8% compared to 2022, with 5.8 million tons, representing 1/3 of the total. Sugar also rose 17.8%, registering 2.4 million tons shipped.
We reiterate the importance of sending shipping instructions in advance, given that ships bound for the main ports in North America and Europe are already busy.
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.