KCNY and Currency
Coffee prices on the New York Stock Exchange were quoted between 150.05 and 164.50 cents per pound on the December/23 expiration date, the most liquid, totaling a volatility of 1,445 points for the week. The downward movement has intensified since Thursday (21), due to several factors.
The weather continues to be closely monitored: extreme temperatures this week in the coffee-growing regions and rains expected for next week; the market is continuesly trying to calculate the impact on the next flowering and the production capacity of the next crop.
The strengthening dollar has also had a major influence on this market movement. On Wednesday (20), the FED (US Central Bank) kept interest rates in the country at between 5.25% and 5.5% p.a., while the COPOM (Brazilian Monetary Policy Committee) lowered the Selic rate by half a percentage point to 12.75% p.a. These decisions had an impact on the dollar, strengthening the currency.
Another important event of the week was the reduction in the initial margin for trading on NY ICE: the amount was reduced from USD 5,250 to USD 4,125 per lot, representing a decrease of 21.4%. The change will be applied from the close of trading on Friday (22).
Certified stocks of coffee on the NY ICE closed Thursday (21) at 440,853 60kg, just 1,695 bags down on the week. There are currently 15,391 bags of coffee from Brazil awaiting certification.
DECEMBER/23: Min: 150,05 | Max: 164,50 | Last: 151,15
BRL/USD: Min: 4,8408 | Max: 4,9388 | Last: 4,9259
*Data until completion of this report.
WEATHER
The spring season begins on September 23th at 3:50am and will end on December 22th at 00:27am. Spring begins with high temperatures in all coffee-growing regions, as a large mass of warm air gains intensity between September 27th and 28th. The maximum temperature is expected to be between 10 and 12 degrees above the average for the month.
Weather forecast models show that there is a possibility of hailstorms in some coffee-growing regions between September 26th and October 1st.
Rain forecast for the week:
South of Minas Region: Between 20 and 30 mm.
Zona da Mata Region: Between 20 and 30 mm.
Cerrado Mineiro Region: Between15 and 20 mm.
Alta Mogiana Region : Between 20 and 30 mm.
Garça Region : Between 10 and 20 mm.
DOMESTIC MARKET and FOB
Offers on the physical coffee market are constant, but the bases between buyers and sellers remain different. During the rise of the NY ICE, buyers didn’t adjust their bases, but when the downward movement began, the bases were reduced. Even so, with the appreciation of the dollar offsetting the declines on the NY ICE, some trades were recorded.
On the FOB, some group 1 deals were reported, while Rio Minas deals were more timid, despite there being plenty of offers.
The requests from sellers in the domestic were 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$ 730,00;
600 defects: close to R$ 700,00;
LOGISTICS
The 2nd Port & Sea 2023 Meeting, organized by the Tribuna Group in Brasilia, will take place on Wednesday 27th. According to the group’s website, the new PAC (Growth Acceleration Program), which estimates investments of R$349.1 billion for the transport sector, will be the main topic. Demétrio Amono, Commercial Director of Grupo Tribuna, said that the PAC investments and the impact on the port sector – especially the Port of Santos – will be the focus.
Maersk and CMA CGM, two of the world’s largest container ship owners, have jointly announced zero greenhouse gas emission targets.
Helping to establish the mass production of green methane and green methanol, developing standards for the operation of vessels powered by green methanol, and accelerating the preparation of ports to supply ships with bio/methanol and methanol are among the objectives of this partnership, according to the DatamarNews portal.
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.