KCNY and Currency
Coffee quotations on the New York Stock Exchange ranged between 147.30 and 160.50 cents per pound on the December/23 expiration date, the most liquid, with total volatility of 1,320 points in the week, 715 of them only on Friday, when it broke through the month’s high, which until then had been 156.35 on September 1st.
On the currency front, the dollar lost strength this week despite inflation data in the US and the expectation that the interest rate hike cycle is nearing its end. Better than expected economic data from China also contributed to the movement. On Wednesday (13) Cecafé released data on Brazilian exports in August/23, which totaled 3.673 million 60kg bags, a volume that implies growth of 29.4% compared to the same period last year. The increase in Robusta exports was impressive in the period, reaching 699,000 bags.
Certified stocks of coffee on the NY ICE closed Thursday (14) at 442,548 60kg bags, representing a drop of 42,190 bags over the last two weeks. There are currently 19,820 bags of coffee from Brazil awaiting certification.
DECEMBER/23: Min: 147,30 | Max: 160,50 | Last: 159,15
BRL/USD: Min: 4,8595 | Max: 4,9718 | Last: 4,8688
*Data until completion of this report.
WEATHER
The next few days should be characterized by high temperatures and low relative humidity in the coffee-growing regions. A cold front is expected to act in the south of Brazil, and in the southeast the warm air mass will once again predominate.
Climate forecast models show that El Niño is becoming more intense as the days go by, and this year’s rainy season is likely to be delayed.
No rain is expected in the coffee-growing regions over the next few days.
DOMESTIC MARKET and FOB
The physical coffee market had a lot of offers this week, especially in times of recovery on the NY ICE, although the dollar worked in the opposite direction and prices had very few changes. Exporters took advantage of the highs to negotiate replacements for their shipments. On FOB, demand is improving, with still tighter differentials for group 1. For Rio Minas, buyers and sellers are still far apart in their bases, but with the movements on the stock exchange some businesses have been reported.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 800,00
Strictly soft fine cup running screen: seller close to R$ 850,00
Rio Minas: Running screen with 25% low grades close to R$ 750,00;
600 defects: close to R$ 710,00;
LOGISTICS
According to the Brazilian export data released by Cecafe, mentioned above, the increase in conilon and robusta exports, as well as the recovery in arabica shipments, were highlighted. The president of the Council, Márcio Ferreira, explained that Brazilian conilon and robusta coffees are standing out due to the difficulties faced by other major producers (such as Vietnam and Indonesia) because of adverse weather conditions and a drop in production.
From the 9th to the 11th, another edition of the Paris Coffee Show took place, which is France’s main coffee event and had more than 80 exhibitors and 5,000 visitors. Cecafé was present and spoke on two strategic sustainability panels: “Fair promotion of coffee production: the challenges for producers and importers of green coffee” and “Agroforestry and sustainable systems”. On this occasion, the organization of the national coffee sector and its environmental, social and economic responsibilities were highlighted.
This week, the ports of Rio de Janeiro, Santos and Vitória once again faced serious restrictions on stocks of standard food containers, severely impacting schedules.
The restriction of space on ships leaving in the next 4 to 6 weeks is also already significant.
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.