KCNY AND CURRENCY
In a week marked by the First Notice Date, coffee prices on the NY exchange continue to reach historic highs, showing no signs of slowing down, with volatility exceeding 2400 points. During Brazil’s holiday on Wednesday (20th), the market surged significantly, closing 4% higher than the previous day’s settlement, and offers above R$2,000.00 per 60kg bag were reported in the domestic market. Additionally, this upward trend continued on Friday (22nd), reaching a peak of $303.90 cents/lb.
Concerns about coffee bean supply remain in focus, as soil conditions still show a water deficit due to a prolonged lack of rainfall, leading to revised crop forecasts. Weather conditions in Brazil and Vietnam continue to be closely monitored.
Prices for the March/25 expiry date since 01/01/24. Source: Barchart.
In the foreign exchange market, the US dollar traded between R$5.7341 and R$5.8345, with attention divided between domestic fiscal concerns and escalating tensions in the Russia-Ukraine war. The conflict returned to the spotlight following Russia’s recent relaxation of rules on the use of nuclear weapons—a response to reports that the United States had authorized Ukraine to use American missiles in retaliation for Russian attacks.
Domestically, Finance Minister Fernando Haddad indicated in a statement that the announcement of a spending cut package is expected to occur next Monday or Tuesday (November 25 and 26, respectively).
The Commodity Futures Trading Commission (CFTC) released its Traders Positioning Report this Friday (22), covering the week ending Tuesday (19). The report showed an increase in net long positions by 505 contracts, with a total net long position of 40,744 contracts, compared to the previous balance of 40,239 contracts on November 15.
Certified stocks closed this Friday (22) at a total of 884,538 60kg bags, with 82,325 bags pending approval.
March/25: Min: 279.00 | Max: 303.90 | Last: 302.10
BRL/USD: Min: 5.7341 | Max: 5,8345 | Last: 5.8132
*Data up to the finalization of this report
WEATHER
A cold front is moving through the Southeast region of Brazil, and it may bring rainfall to all coffee-growing areas on the next days. However, the heaviest rainfalls are expected to occur in northern Espírito Santo and southern Bahia.
In November, three cold fronts have already reached the Southeast region, and models indicate that another cold front is likely to hit the area by the end of the month. Last year, November was characterized by a lack of precipitation and an intense heatwave.
Rain forecast for the week:
South Minas region: between 20 and 30 mm.
Zona da Mata region: between 20 and 30 mm.
Cerrado region: between 10 and 20 mm.
Alta Mogiana region: between 10 and 20 mm.
Garça region: between 5 and 10 mm.
DOMESTIC MARKET AND FOB
In the FOB market, trading remained stalled due to the high volatility on NY ICE. Despite the historically high levels, differentials remain narrow, making sales unfeasible. In the domestic market, trading volumes were extremely low, directly reflecting market instability.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 1,850.00
- Strictly soft fine cup running screen up to R$ 2,000.00
- Rio Minas running screen around R$ 1,550.00
- 600 defects around R$ 1,400.00
LOGISTICS
Brazilian ports continue to show their limitations in meeting users’ needs, especially during this period of seasonal volumes of coffee, sugar, cotton, tobacco, and fruits. As a result of cargo accumulation at port terminals, receiving gates are opening very close to the final deadlines and with insufficient window availability, making cargo deposits more challenging.
There is also an increase in the number of skipped port calls and cargo rollovers due to reduced capacity in some shipping lines’ services.
- According to the Notícias Agrícolas portal, the Port of Santos recorded the highest cargo throughput in its historical series for the month of October 2024. A total of 15.5 million tons were handled, representing an 8.4% increase compared to the same period in 2023. From January to October, the total volume reached 153.0 million tons, a growth of 7.7% compared to the same period last year. This result marks a record for the period, reaffirming Santos’ prominent role in the Brazilian port sector.
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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.