KCNY AND CURRENCY
During the week marked by Thanksgiving Day (11/28), coffee prices on the NY exchange showed greater volatility compared to the previous week, with a weekly range of 3395 points and a new high recorded this Friday at $335.45 cents/lb, representing an 11% increase compared to last Friday’s (11/22) settlement.
Droughts, high temperatures, and potential production losses have contributed to the consecutive price increases seen in recent months. This Friday, however, prices showed signs of correction, with a low of $316.80 cents/lb for the March/25 contract. Furthermore, the scenario of well-capitalized producers could provide new support for prices, even amid signs of an overbought market.
Prices for the March/25 expiry date since 01/01/24. Source: Barchart.
In the currency market, the U.S. dollar reached R$6.00 for the first time amid skepticism over Brazil’s fiscal package. Earlier this week, U.S. President-elect Donald Trump appointed Scott Bessent as Secretary of the Treasury. The choice was well-received as it signals stability for the path of U.S. public debt.
Domestically, the government’s spending containment measures are still awaited. Despite concerns about the state of public finances, the federal government announced it will propose to Congress an income tax exemption for those earning up to R$5,000 per month. On the other hand, on Thursday (11/28), Minister Fernando Haddad provided details on spending cuts, indicating reductions of R$71.9 billion over the next two years, with R$30.6 billion in 2025 and R$41.3 billion in 2026. This Friday, the rally pushed the spot dollar to R$6.1143 but erased its gains after statements emphasizing a stronger commitment to fiscal policy made by Arthur Lira and Rodrigo Pacheco, presidents of the House and Senate, respectively.
The certified stocks closed this Friday (29th) totaling 900,548 60kg bags, 16,000 bags more than last Friday, with 78,182 bags still pending approval.
March/25: Min: 301.5 | Max: 335.45 | Last: 318.05
BRL/USD: Min: 5.7768 | Max: 6.1143 | Last: 6.0068
*Data up to the finalization of this report
WEATHER
This weekend, the heat combined with high humidity may trigger isolated showers in the regions of South Minas, Cerrado, Mogiana, and Garça.
A new cold front is expected to reach the Southeast region of Brazil on December 2 and will likely remain partially stationary between Minas Gerais and São Paulo for a week. Moderate rainfall is forecasted for the regions of Garça, Mogiana, and South Minas.
Rain forecast for the week:
South Minas region: between 20 and 30 mm.
Zona da Mata region: between 10 and 20 mm.
Cerrado region: between 10 and 20 mm.
Alta Mogiana region: between 50 and 70 mm.
Garça region: between 60 and 80 mm.
DOMESTIC MARKET AND FOB
Due to volatility and the high levels reached on NY ICE, both the FOB and domestic markets remain stalled. In the FOB market, there is little demand, while in the domestic market, buying and selling price bases remain misaligned.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 2,100.00
- Strictly soft fine cup running screen up to R$ 2,200.00
- Rio Minas running screen around R$ 1,900.00
- 600 defects around R$ 1,950.00
LOGISTICS
- The Brazilian Coffee Exporters Council (Cecafé) reported that Brazilian exporters continue to face logistical challenges due to insufficient infrastructure for containerized cargo at ports. In 2024, delays, changes in ship schedules, and frequent cargo rollovers resulted in 1.717 million bags of coffee – equivalent to 5,203 containers – not being shipped by October, according to the organization’s survey with associated exporters. (Source: IstoÉ)
- As reported by Notícias Agrícolas, Brazilian federal tax auditors have initiated an indefinite nationwide strike, demanding higher wages. The strike, which began on Tuesday, includes a protest planned for next week in Brasília. This mobilization raises concerns in sectors such as agricultural commodities, capital goods imports, and shipping, potentially affecting cargo movement at strategic ports like Santos, the largest in Latin America.
ATTENTION
The only official Atlantica Coffee e-mail domain is: atlanticacoffee.com
Be aware of the sender of the messages and always question instructions for changing banking data!
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.