KCNY and Currency
Coffee on the New York Stock Exchange had a volatile week, and prices broke through 190 cents/lb, an important technical line. The May/24 expiration date is still the most liquid and worked between 183.35 and 192.50 cents/lb. Robusta’s recent strong rises on the London stock exchange, given the variety’s supply problems, continue to play an important role in supporting Arabica in NY. The arbitrage between NY and London continues to be tight, encouraging greater demand for low-grade arabica. The dollar was quoted at between 4.9654 and 5.0180.
As of last Wednesday (27), certificates of origin had been issued for more than 3.5 million bags that are already being shipped this March. By that date, 3.148 million bags had already been shipped. Conilon exports continue to be strong and as of yesterday more than 682,000 bags had already been shipped.
On Friday (22), the Commodity Futures Trading Commission (CFTC) released the Traders’ Position Report for the week ended Tuesday (19), in which the funds increased their long position by 5,560 lots, totaling 28,469 lots against a balance of 34,029 for the previous week.
Certified stocks continue to recover and are close to 600,000 bags. On Thursday (28) stocks closed at 595,209 60 kg bags. There are currently 73,881 bags pending approval.
MAY/24: Min: 179.35 | Max: 188.40 | Last: 188.85
BRL/USD: Min: 4.9654 | Max: 5.0180 | Last: 5.0145
*Data as of the completion of this report
WEATHER
The cold front that arrived in the Southeast on March 21, the first of the fall, is still partially stationary between the states of Minas Gerais and São Paulo. Weather models show that it should dissipate off the southern coast of Bahia from April 2.
Moderate rainfall is forecast for the next four days in the regions of South Minas, Cerrado, Zona da Mata, northern Espírito Santo and southern Bahia.
Rain forecast for the week:
South Minas region: between 40 and 60 mm.
Zona da Mata region: between 40 and 60 mm.
Cerrado region: between 40 and 60 mm.
Alta Mogiana region: between 30 and 40 mm.
Garça region: between 20 and 30 mm.
DOMESTIC MARKET and FOB
With the gains in arabica on the NY stock exchange, the domestic market was very busy, taking advantage of the fluctuations in NY and the dollar and with several deals in all the producing regions. On the FOB, demand for low-grade arabica such as grinders and 600 defects continue to be strong, given the recent difficulties with robusta. Regarding Rio Minas quality, there are some buyers looking for upcoming shipments, but the domestic market continues to have few offers, making it difficult for exporters to get replacements. As for fine and good cup, some deals were reported this week, with buyers increasingly looking for short-term shipments.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller around BRL 1,040.00
Strictly soft fine cup running screen: seller around BRL 1,080.00
Rio Minas: Running screen with 25% low grades around BRL 950.00 with few sellers;
600 defects: around BRL 920.00
LOGISTICS
The frequent changes to shipping schedules continue to hamper exports and generate extra costs for exporters. Most of the time, these changes occur after the empty containers have been picked up, impacting on the control of equipment overstays, or even after they have been filled, causing expenses for early receipt or pre-stacking (storage in a terminal or yard until the gate opens). We would also like to draw attention to the low stocks of containers, especially 40′ containers, and to the restricted allocation to ships leaving in the next 4 weeks.
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.