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Weekly report – Brazilian Coffee Market – September 25th ~ 29th 2023

by Sep 29, 2023Market report0 comments

KCNY and Currency

Coffee prices on the New York Stock Exchange ranged between 144.95 and 152.15 cents per pound on the December/23 expiration date, the most liquid one, totaling a volatility of 720 points over the week, when prices once again broke through 150 cents per pound. In addition to the weather, the macroeconomic environment of a strengthening dollar and risk aversion contributed to this movement in commodity prices.   

The foreign exchange market also fluctuated, during the week the dollar was quoted between R$4.9377 and R$5.0792, breaking through the important R$5.00 level, due to, among other factors, expectations of an increase in US interest rates.  

Certified stocks of coffee on the NY ICE closed Thursday (28) at 444,073 60kg bags, with 3,860 bags from Brazil approved and 1,280 rejected, leaving 8,731 bags of coffee from Brazil awaiting certification. 

DECEMBER/23: Min: 144.95 | Max: 152.15 | Last: 146.15 
BRL/USD: Min: 4.9377 | Max: 5.0792 | Last: 5.0292 
*Data up to the finalization of this report 


WEATHER

The mass of warm air that is acting in the Southeast of Brazil is weakening due to the arrival of cold fronts coming from the south. The forecast for the next few days is for the arrival of two cold fronts, the first on October 2nd and the second on October 6th.  

There should be moderate rainfall in all coffee-growing regions next week, with the highest volumes in the South Minas and the Zona da Mata. Historically, the rainy season starts at the beginning of October in the Southeast of Brazil.

Rain forecast for the week:

South Minas region: between 50 and 60 mm.  

Zona da Mata region: between 50 and 60 mm.  

Cerrado region: between 15 and 20 mm.  

Alta Mogiana region: between 20 and 30 mm.  

Garça region: between 10 and 20 mm. 


DOMESTIC MARKET and FOB

On the domestic market, with the appreciation of the dollar and the movements of the NY ICE, some deals were possible, although the bases between buyers and sellers are far apart. On the FOB, as coffee prices fell, Rio Minas requests from buyers increased. Some group 1 deals were made. 

The requests from sellers in the domestic were as below:

Strictly soft good cup running screen: seller close to R$ 780.00
Strictly soft fine cup running screen: seller close to R$ 830.00
Rio Minas: Running screen with 25% low grades close to R$ 710.00
600 defects: close to R$ 680.00


LOGISTICS

  • The Brazilian Coffee Exporters Council (Cecafé) took part in a mission of Brazilian agribusiness organizations that visited four European Union countries (Germany, the Netherlands, Belgium and Italy) from September 18 to 22. The aim of the mission was to highlight the sustainability, innovation and competitiveness of Brazilian agriculture, as well as to promote the engagement of local players in the defense of science, predictability and transparency in EU regulatory processes that affect Brazilian agricultural exports and the supply of the European market. 
  • According to the news portal A Tribuna, the Port of Santos is studying the possibility of dredging the area. 
  • According to the Informativo dos Portos portal, the Port of Santos recorded a general cargo movement of 111.4 million tons from January to August 2023, an increase of 1.2% compared to the same period in 2022, confirming record growth. 

There has been no decline in the number of reservations requested for vessels departing in October and no schedules have been canceled and/or postponed this week due to a lack of equipment. 

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.