KCNY AND CURRENCY
On the NY ICE exchange, coffee had another volatile week. The minimum recorded was 250.30 cents per pound, while the maximum reached 264.15, totaling 1385 points of oscillation in the week. As a result, prices closed the week up at 257.30 for the December/24 maturity. Concerns about the tightening of global supply continue, but according to a report by Hedgepoint Global Market, the supply of coffee from Asia should increase by the end of the year, as the harvest in Vietnam is due to start in the coming weeks, which could increase the supply of robusta in the short-term market. In the Brazilian scenario, the impact that the lack of rain in recent months may have on the 2025 crop is still being observed with caution, but there is a good forecast of humidity for the coming weeks and the development of flowers in the producing regions.
Prices for the December/24 expiry date since 01/01/24. Source: Barchart.
On the foreign exchange front, the dollar worked between R$5.7031 and R$5.5650. At the beginning of the week, the focus of attention was on the Chinese Finance Ministry’s promise to increase the country’s debt in order to boost its economy. In addition, Reuters reported that the government is preparing measures to curb mandatory spending. Even so, the stimulus package prepared by China came in lower than expected, causing concern for Brazil, which could be one of the biggest beneficiaries of this package due to its high volume of iron exports. As a result, prices remained stuck due to the uncertainties surrounding Brazil’s fiscal balance.
On Thursday, the European Central Bank cut its main interest rates by 0.25 percentage points. In addition, US retail sales data was released, which came in higher than expected, and supported investors’ idea that US interest rates may not fall as quickly as expected.
The Commodity Futures Trading Commission (CFTC) released on Friday (18) the Traders’ Position Report for the week ended Tuesday (15), where funds increased their long position by 4,633 contracts, totaling 40,657 long lots.
Certified stocks ended Friday (18) totaling 849,709 60 kg bags, representing an increase of 34,622 bags in the last 7 days. There are currently 89,349 bags pending approval.
December/24: Min: 250.30 | Max: 264.15 | Last: 257.30
BRL/USD: Min: 5.5650 | Max: 5.7031 | Last: 5.7004
*Data up to the completion of this report
WEATHER
The cold front that arrived on October 10 marked the beginning of the 2024/2025 rainy season in southeastern Brazil, bringing rains between October 10 and 13 in the coffee-growing regions. Another cold front arrives on October 18, remaining between Minas Gerais and São Paulo, with moderate to heavy rain forecast over the next few days. The accumulated rainfall by October 26 is expected to exceed 150mm in almost all coffee-growing regions.
Rain forecast for the week:
South Minas region: between 150 and 180 mm.
Zona da Mata region: between 150 and 160 mm.
Cerrado region: between 150 and 180 mm.
Alta Mogiana region: between 150 and 160 mm.
Garça region: between 150 and 160 mm.
DOMESTIC MARKET AND FOB
The domestic market continues to show less movement than expected for the period. With producers capitalized, the bases of buyers and sellers remain distant. On the FOB, the differentials are very wide between big and small beans, with aggressive offers for FC and GC MTGB. For the Rio Minas quality, since most of the trades are at outright prices, differentials have opened wide in line with the bullish movements in NY. The Council of the European Union agreed to postpone the date of application of the EUDR by 12 months, to January 1, 2026. The Council’s next step is to notify the European Parliament, which will take a position on the matter. The aim is for the regulation to be formally agreed and published, to enter into force by the end of 2024.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen up to R$ 1,470.00
- Strictly soft fine cup running screen around R$ 1,540.00
- Rio Minas running screen around R$ 1,270.00
- 600 defects was quoted at R$ 1,380.00
LOGISTICS
This week, in addition to the impact of limited container availability and lack of operational predictability for ships, the lack of slots for receiving loaded units also became a problem for shipments through Santos. More than 17 containers, including 20′ and 40′ units, could not be delivered to the Brasil Terminal Portuário (BTP).
- Brazilian port workers will go on a 12-hour strike next Tuesday (22), involving about 60,000 professionals, including 20,000 in Santos. The strike will take place from 7 a.m. to 7 p.m. and is supported by three national federations. (Source: Diário do Litoral)
- The Port of Santos set a record in 2024, handling over 4 million TEUs between January and September, with a 15.8% increase in total weight compared to 2023. In September, container handling grew by 21.7%, reaching 483,600 TEUs. (Source: Portos e Navios)