KCNY and Currency
The week was marked by some volatility in coffee prices on the NY Stock Exchange, which ranged between 177.25 cents and 188.20 cents/lb for the September 2023 contract, the most active one. The notice period for delivery of the July 2023 contract begins next Thursday, the 22nd, and as a result, position roll-overs are nearing completion. The progress of the harvest season is one of the factors contributing to the stability of coffee prices, while the weakening of the dollar is a bullish factor for commodities quoted in the US in general.
In the currency market, the Brazilian real strengthened significantly against the dollar, reaching its lowest level in over a year at R$4.7949, representing a depreciation of over 5% in the month of June 2023. The US Federal Reserve (the central bank of the US) decided to keep interest rates unchanged at between 5% and 5.25%, a decision that weakened the American currency.
The Brazilian Coffee Exporters Council (CECAFÉ) released the export report for May 2023 this week, totaling 2.448 million 60kg bags, of which 1.987 million were arabica. During the same period last year, 2.964 million bags were exported, representing a 17.4% decrease in volume. However, from January to May 2023, a total of 13.6 million bags have already been exported.
Certified coffee stocks at NY ICE closed at 546,325 60kg bags on Thursday (15th), with 11,547 bags pending approval. About a year ago, the stocks totaled 1,007,750 bags.
SEPTEMBER/23: Min: 177,25 | Max: 188,20 | Last: 180,75
BRL/USD: Min: 4,7949 | Max: 4,9005 | Last: 4,8150
*Data as of completion of this report.
WEATHER
The cold front that has been affecting the states of São Paulo and Paraná in the past few days will advance over the weekend towards the northern region of Espírito Santo. There is a possibility of light rain on Saturday only in the Zona da Mata area.
The polar air mass that followed behind the frontal system has weakened, and there is no risk of frost in the Southeast region in the coming days.
Dry air will prevail once again in the coffee-growing regions starting from Monday, the 19th, and sunshine is expected for a good part of the day.
Rain forecast for the week:
South Minas, Cerrado, Alta Mogiana, and Garça: No rain is expected.
Zona da Mata: Possibility of light rain on Saturday, ranging between 5 and 10 mm.
DOMESTIC MARKET and FOB
In the domestic market, despite the strengthening of the Brazilian real, exporters took advantage of the moments of price increase on the NY ICE to conduct some business according to their needs. Offers for new crop coffee are already increasing. It was a busy week regarding Rio Minas coffee quality in terms of FOB market activity, while demand for other coffee qualities was sporadic.
The ideas of sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 930,00
Strictly soft fine cup running screen: seller close to R$ 1.020,00
Rio Minas:
Running screen with 25% low grades close to R$ 830,00
17/18 around R$ 920,00
14/16 around R$ 890,00
600 defects: close to R$ 860,00;
LOGISTICS
According to A Tribuna portal, authorities, businesspeople, and other representatives from the port sector met last Thursday (15/06) at the Santos Commercial Association to discuss the access bottlenecks to the port, particularly on the right bank (Alemoa region), considering the prospect of increased harvests in the second semester. Increasing the number of agents from the Traffic Engineering Company (CET-Santos), as well as deploying more police officers in the area, are some short- and medium-term actions suggested by Bruno Orlandi, the Secretary of Port Subjetcs and Employment of Santos. Ships with departures scheduled for June already have limited available allocation.
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.