KCNY AND CURRENCY
Coffee prices on the NY stock exchange ended another week down, at 236.00 on the December/24 expiration date. In a shorter week, due to the American Labor Day holiday on Monday (02), prices reached a high of 248.55 on Thursday and then fell back, reaching a low of 235.30 on Friday (06). With a fluctuation of 1,325 points over the week, the market worked both up and down on a daily basis, reiterating the extreme volatility that has dictated the coffee price scenario.
The main factor on the coffee market’s radar continues to be the weather, which corroborates the bullish trend. In Brazil, the flowering season has arrived, which will result in the 25/26 crop, and the dry, hot weather continues to be closely monitored. The rain must come in the next few weeks to help the blossoms set. Vietnam and Indonesia, as the first and third largest robusta producers, are also being watched and ICE LONDON continues to see record prices, so that the KCZ4 X LDNX24 arbitrage ended the week quoted at -17.8. It’s important to note that the KCZ4 x BMF Z4 arbitrage was around -17 on Friday, showing that robusta keeps getting more expensive than arabica.
Prices for the December/24 expiry date since 01/01/24. Source: Barchart.
On the foreign exchange market, the dollar worked between R$5.5289 and R$5.66, with data from the US private labor market coming in lower than projected, consolidating an interest rate cut at the next FED meeting. Domestically, it is possible that the interest rate will be raised on the 18th. As a result, the dollar ended the week quoted at R$5.5914
The Commodity Futures Trading Commission (CFTC) released on Friday (06) a report on the positioning of Traders in the market for the week ended Tuesday (03), in which the funds reduced their long balance by 4,096 lots, to a total of 39,101, compared to 43,197 lots in the previous week (27).
Certified stocks ended Friday (06) at 843,847 60 kg bags, with 43,792 bags still pending approval, reducing by 4,026 bags on the week.
December/24: Min: 235.30 | Max: 248.55 | Last: 236.00
BRL/USD: Min: 5.5289 | Max: 5.66 | Last: 5.5914
*Data up to the completion of this report
WEATHER
A mass of warm, dry air should predominate in the coffee-growing regions over the next few days, as the cold front forecast for the São Paulo coast over the weekend is unlikely to change the weather conditions on the mainland.
Weather models indicate that, as of September 19, the weather will begin to change in the coffee-growing regions, with the arrival of a cold front in the Southeast of Brazil, marking the beginning of the rainy season in the region.
There is no rain forecast for the week.
DOMESTIC MARKET AND FOB
With sellers capitalized and NY ICE coffee prices falling, the domestic market saw metered offers and buyers with their bases still distant from orders. On the FOB, the week was quiet, with no major demand and with isolated group 1 quotations. With NY ICE further down, some differentials narrowed and the difference between large and small beans remains firm at over 12 cents/lb in all qualities. As for Rio Minas, some deals were reported at good levels for both buyer and seller, especially for MTGB.
The requests from sellers in the domestic are as below:
- Strictly soft good cup running screen around R$ 1,420.00
- Strictly soft fine cup running screen around R$ 1,500.00
- Rio Minas running screen between R$ 1,170.00 and R$ 1,200.00 depending on the cup profile and quantity of low grades;
- 600 defects was quoted at R$ 1,320.00
LOGISTICS
The short supply of 20′ containers has become a constant difficulty for exports. Some shipowners are only signaling availability for week 38 of the year. Ships bound for the main ports in North America have practically run out of space for September and early October departures.
- According to the A Tribuna portal, the National Waterway Transportation Agency (ANTAQ) granted a precautionary measure on Wednesday (4) suspending a rule issued by the Santos Port Authority (APS). This rule, in force since August 21, required ships to present a certificate of conformity for ballast water as a condition for docking at the Santos pier.