KCNY and Currency
Coffee prices on the New York Stock Exchange began the week with high volatility, marking a significant rise of 1,125 points for its most liquid expiration date, September/24. This movement was marked by news of the arrival of a polar air mass in southern Brazil in the first week of July, but on Tuesday the market fell 695 points due to a change in the weather forecast. On Wednesday, a range of 990 points was observed, favored by the appreciation of the dollar against other currencies, further boosting national exports and affecting prices. On the last two days of the week, there were more contained movements in the adjustments, ending the week at 226.80, an increase of 180 points compared to last Friday (21/06). The bullish factor has also been influenced by concerns about the total Brazilian crop due to low yields and past periods of heat and drought.
Prices for the September/24 maturity since 01/01/24. Source: Barchart.
In terms of the exchange rate, the dollar has continued to rise this week with new concerns and uncertainties about the Brazilian government. President Lula’s speeches about adjustments to public accounts have not encouraged investors and have led to a surge in the dollar. Disagreements between the president of the Central Bank, the country’s president and Finance Minister Fernando Haddad remain on the radar, dictating the direction of the Brazilian currency. In addition to monitoring the FED’s speeches and its indications of an interest rate cut.
On Monday (24), the CFTC released its trader positioning report. For the second week running, there was a reduction of 1,618 lots in the balance bought by speculative funds, ending the week with a balance of 43,321 compared to 44,939 the previous week. The new report is due to be released today, June 28.
Certified stocks fell on a weekly basis, ending Friday (June 28) at 807,349 bags, down 24,201 60-kg bags on the week, but still with a volume of certified bags up 3% on the end of May. There are currently 42,487 pending bags.
SEPTEMBER/24: Min: 222.05 | Max: 237.55 | Last: 226.80
BRL/USD: Min: 5.3753 | Max: 5.5852 | Last: 5.5656
*Data as of the completion of this report
WEATHER
A weak cold front is passing along the coast of southeastern Brazil. There is a chance of light rain only in the Garça and Mogiana regions.
The polar air mass that is coming in behind the frontal system should cause frost in southern Brazil, however, the polar air mass arrives with low intensity in the southeast.
South Minas, Zona da Mata and Cerrado regions: No rain forecast
Alta Mogiana and Garça regions: between 5 and 10 mm.
DOMESTIC MARKET and FOB
Although the volume of available coffee is increasing, the offers are still mismatched between sellers and buyers, which makes it difficult for domestic market business to flow smoothly.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen around R$ 1,400.00
Strictly soft fine cup running screen around R$ 1,550.00
Rio Minas: running screen between R$ 1,260.00 and R$ 1,360.00
600 defects around R$ 1,250.00
LOGISTICS
In May, 54% of ships suffered delays in their calls, impacting exporters’ logistics and generating extra pre-stacking costs.
Shipowners MSC and ZIM are experiencing difficulties in releasing containers, indicating a scenario of low stocks of units to fulfill shipments. There are reports of some exporters who have lost shipments due to non-release of units.
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.