KCNY AND CURRENCY
On the NY ICE, coffee prices fluctuated throughout the week but were on a downward trend. On the December/24 expiration date, still the most liquid, the high was 254.65 cents per pound, while the low was 243.15; prices ended the week down at 248.40. Without much news on the market, prices were driven up by the evolution of crop conditions in Brazil and the improvement in climatic conditions in the country, with the arrival of good rains in the producing regions after a long period of drought. Even so, the impacts of the dry period on the crops are being felt by the market, as well as the start of the harvest period in Vietnam, the world’s second largest coffee producer.
Prices for the December/24 expiry date since 01/01/24. Source: Barchart.
The foreign exchange market is also volatile. Expectations about the US elections have been an important factor in putting pressure on the Real, as well as fiscal uncertainties in the domestic environment.
On Friday (25), the Commodity Futures Trading Commission (CFTC) released a report on traders’ positions in the market for the week ended Tuesday (22), in which funds reduced their long position by 1,926 contracts, totaling 38,731 long lots.
Certified stocks ended Friday (25) at 843,284 60 kg bags, with 118,437 bags pending approval. A year ago, stocks totaled 410,171 bags, representing an increase of 433,113 bags over the period.
December/24: Min: 243.15 | Max: 254.65 | Last: 248.40
BRL/USD: Min: 5.6602 | Max: 5.7345 | Last: 5.7057
*Data up to the completion of this report
WEATHER
A cold front hitting the southeast of Brazil this Friday, the 25th, is expected to remain in Minas Gerais throughout next week. The South Atlantic Convergence Zone will bring high humidity, feeding the frontal system and contributing to the formation of clouds. The forecast indicates rainfall in all coffee-growing regions, with the highest volumes expected in the Cerrado and Zona da Mata.
Rain forecast for the week:
South Minas region: between 60 and 80 mm.
Zona da Mata region: between 100 and 140 mm.
Cerrado region: between 100 and 140 mm.
Alta Mogiana region: between 40 and 50 mm.
Garça region: between 20 and 30 mm.
DOMESTIC MARKET AND FOB
The physical domestic market saw occasional trading during the week, with sellers more withdrawn and buyers less aggressive, in line with the movements of NY ICE and the dollar. On the FOB, the market continues to lack significant demand, although there are roasters with large demands for shipments in the short term. Some deals were made for deliveries in 2025, but in general exporters are still waiting for market directions in New York and the outcome of the EUDR postponement proposal.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 1,480.00
- Strictly soft fine cup running screen around R$ 1,550.00
- Rio Minas running screen around R$ 1,215.00
- 600 defects was quoted at R$ 1,360.00
LOGISTICS
This week, we continue to be affected by the low stock of containers, though the impact has been milder. However, vessel rescheduling changes remain frequent, and we experienced some pre-stacking incidents due to delays after stuffing. In all cases, early receipt was denied by the port terminal. Additionally, we want to highlight the lack of space on vessels departing in the next 4 to 6 weeks.
- Between January and September 2024, Brazil accumulated 2.155 million bags of coffee that were not shipped from national port complexes, resulting in a loss of R$ 3.2 billion. The Port of Santos accounted for R$ 1.9 billion of this total, with 1.339 million bags not exported, according to Cecafé.
- On Tuesday, the 22nd, a 12-hour strike occurred at almost all public ports in Brazil in protest against changes to the Ports Law. Since port workers typically operate in 6-hour shifts, the strike only impacted part of the day’s productivity. (Source: Notícias Agrícolas)
- Atlantica participated in the first coffee export using the break bulk method at the Porto do Açu, located in northern Rio de Janeiro. During the operation, 5.5 thousand tons of arabica and conilon coffee were shipped, with lots from exporters of southern and eastern Minas Gerais, Espírito Santo, and Bahia.