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Weekly report – Brazilian Coffee Market – November 20th ~ 24th 2023

by Nov 24, 2023Market report0 comments

KCNY and Currency

Coffee prices on the New York Stock Exchange worked between 165.25 and 173.40 cents per pound on the March/24 expiration date, the most liquid one, totaling a volatility of 815 points for the week. The week was a little shorter on the NY ICE due to the American Thanksgiving holiday on Thursday (23). The climate of volatility remains.  

On the exchange rate, the real and the dollar continue to fluctuate in their valuations, with quotes for the week working from R$4.84 to R$4.91, against a backdrop of risk aversion. Domestically, there are expectations that the Central Bank will continue its interest rate cut cycle.  

Certified coffee stocks on the NY ICE closed Wednesday (22) at 290,734 60kg bags, with 17,625 bags pending approval, of which 3,365 bags from Brazil were classified and rejected during the session. A year ago, stocks totaled 530,105 bags, representing a drop of 239,371 bags in the period. Stocks are at their lowest level in 24 years. 

MARCH/24: Min: 165.25 | Max: 173.40 | Last: 168.15 
BRL/USD: Min: 4.8448 | Max: 4.9194 | Last: 4.8987 
*Data up to the finalization of this report 


WEATHER

A cold front arrived in the state of São Paulo on Thursday and is expected to advance along the coast of the Southeast during the weekend. The frontal system should dissipate in the south of Bahia on Monday.  

Throughout the week, rain is forecast, mainly in the afternoon and evening, in the coffee-growing regions of Garça, South Minas, Mogiana, Zona da Mata and Cerrado. According to weather models, the last week of November and the first week of December should be marked by rain in these areas, covering the South Minas, Mogiana, Garça and Cerrado regions. 

Rainfall forecast for the week:  

South Minas region: between 50 and 60 mm  

Zona da Mata region: between 50 and 60 mm  

Cerrado region: between 40 and 50 mm  

Alta Mogiana region: between 50 and 60 mm  

Garça region: between 50 and 60 mm 


DOMESTIC MARKET and FOB

On the domestic market, even though there is a lot of coffee, and the warehouses are full, the selling end is still far from the buying end and producers remain firm on their prices. Some lots have been reported as short-term business, depending on market and dollar fluctuations. On the FOB, there is still demand for the short term and in all coffee qualities, although prices are also far apart. In group 2, buyers’ expectations of a fixed price are still far from the prices. 

The requests from sellers in the domestic were as below:

Strictly soft good cup running screen: seller close to R$ 870.00
Strictly soft fine cup running screen: seller close to R$ 930.00
Rio Minas: Running screen with 25% low grades close to R$ 750.00
600 defects: close to R$ 730.00


LOGISTICS

  • According to the A Tribuna portal, the president of the Santos Port Authority (APS), Anderson Pomini, has released schedules of infrastructure works that will be accelerated from next year.  
  • The Antaq 2023 Summit was held on Thursday (23), a dialog between the National Waterway Transport Agency (Antaq) and the port production chain, with important themes focused on infrastructure, logistics and sustainability. 

Shipping companies continue to face severe shortages of food grade equipment, especially 20′ containers. In some cases, the lack of a pick-up window has also been an obstacle, due to high demand. In order to prevent these restrictions from resulting in missed shipments, our carriers have been advancing their booking procedures.  

We have not yet seen a decline in new bookings on the December ships due to a lack of allocation on the vessels. 

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.