KCNY and Currency
For the May/24 expiration date, the most liquid, prices were between 181.25 and 187.90 cents/lb, with a range of 665 points for the week, lower than in previous weeks, but still showing daily volatility. The tight supply of robusta continues to drive prices, but the outlook for the 24/25 arabica crop and other fundamentals are positive factors holding down arabica prices on the NY exchange. The arbitrage between New York and LONDON continues to be tight, with prices quoted at -34 to -38 LDNK4 x KCK4 for the week, strengthening demand for low arabica.
The dollar was quoted at between R$4.9537 and R$5.0016 for the week, with the real losing strength. Brazil’s uncertain domestic scenario contributed to the movement, as did the release of the US CPI (Consumer Price Index) for February/24, which rose by 0.4% as expected, strengthening expectations that the US central bank should wait until June to start the country’s interest rate cut cycle. The US Payroll (job creation data) was released on the 8th and showed a higher than expected figure, which also contributes to the country’s interest rate being held for a while.
On Monday (11), Cecafé released data on Brazilian coffee exports for the month of February, which totaled 3.626 million 60kg bags. This figure represents an increase of 48.9% compared to the same period in 2023, when 2.435 million bags were exported. Once again, conilon exports were surprising, totaling 570,000 bags in the month.
On Friday (08), the Commodity Futures Trading Commission (CFTC) released the Traders’ Position Report for the week ended Tuesday (05), in which the funds increased their long position by 516 lots, totaling 32,642 against a balance of 32,126 the previous week.
Certified coffee stocks on the NY ICE continue to recover and closed on Thursday (14) at 467,825 60 kg bags, representing an increase of 56,948 bags over the last week, of which 43,263 were of Brazilian origin. There are currently 161,733 bags of coffee awaiting approval.
MAY/24: Min: 181.25 | Max: 187.90 | Last: 182.95
BRL/USD: Min: 4.9537 | Max: 5.0016 | Last: 4.9967
*Data as of the completion of this report
WEATHER
The warm air mass that has formed over the last two days in Paraguay is expected to expand over the weekend to the Garça and Mogiana regions, where temperatures may reach over 38ºC. This is the first heatwave to hit the southeast of Brazil this year.
The cold front arriving in the southeast on Monday (18) could cause moderate rainfall next week in the regions of Garça, Mogiana, South Minas and Cerrado.
Rain forecast for the week:
South Minas region: between 40 and 50 mm.
Zona da Mata region: between 5 and 10 mm.
Cerrado region: between 50 and 60 mm.
Alta Mogiana region: between 30 and 40 mm.
Garça region: between 30 and 40 mm.
DOMESTIC MARKET and FOB
The physical market remained stable this week, with buyers trading as needed. On the FOB, there were some negotiations for shipment from June onwards, as well as some new crop deals, although orders for shipment in the short term still exist. The pace of business for Rio Minas quality slowed down a little, given the start of Ramadan, but some business was seen, as well as some offers to ship the 24/25 crop.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller around BRL 1,010.00
Strictly soft fine cup running screen: seller around BRL 1,050.00
Rio Minas: Running screen with 25% low grades around BRL 920.00
600 defects: around BRL 900.00
LOGISTICS
Exports through the Port of Santos have been subject to a lot of delays due to operational difficulties in the country’s southern ports. Through the Port of Rio de Janeiro we have encountered difficulties with food grade containers, but the flow continues with fewer delays. Shipowners are producing fewer and fewer 20′ containers, which makes it difficult for exporters to find equipment to fulfill their contracts in this type, and the volume of units considered food grade is even lower. The conflicts in the Red Sea and Israel continue, causing delays on the routes surrounding them, and some ports in the Middle East are congested.
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.