Coffee: New York Stock Exchange Rises Nearly 200 Pts on Tuesday and Maturities Return to Approximately USD 1.30/lb

Future prices for Arabica coffee on the New York Stock Exchange (ICE Futures US) closed the session on Tuesday (April 19, 2016) with a high of almost 200 points. This is the second consecutive session that foreign prices appreciated. The farther December/16 maturity closed above the USD 1.30 per pound level. The market reflected fluctuations in the exchange rate and the absence of sales from the producing sources.

The May/16 contract closed the day at 125.85 cents/lb with a high of 185 points. The July/16 had 127.90 cents/lb and the September/16 noted 129.60 cents lb, both with 195 points advance. The December/16 maturity was 131.85 cents/lb with 200 points of appreciation.

Following the Central Bank’s actions seeking exchange rate stability on Monday, the trade dollar retreated sharply on Tuesday, reflecting the unfolding of President Dilma Rousseff’s impeachment process. The foreign currency closed the day quoted at 3.528 on sale with fall of 1.92%. The lower dollar discourages Brazil’s exports of the commodity.

Until the 17th (11 business days), Brazilian coffee bean exports totaled 1.254 million*60kg bags with revenue of USD 181.8 million and average price of USD 144.90 per bag. In March 2016, shipments registered 2.775 million bags and in April 2015 were exported 2.815 million bags.

According to Maros Corretora market analyst Marcus Magalhães, quotations have managed to maintain a good break in the trading session. “For tomorrow, quick profit-making operations can be seen, but nothing that takes away the positive market bias for now,” he says.

Accompanying the exchange rate, ICE arabic futures rose by more than 300 points in the early afternoon. However, information about Brazil’s good production potential this season eventually reduced earnings at the end of the session.

In addition, according to international agencies, market consolidation above $ 1.25/lb in recent sessions and the lack of sales from producing sources also end up giving some support to quotes. Brazil, which is the largest producer and exporter of the commodity in the world, is in the off-season and has been offering less coffee in the market in recent days.

Intern market

Coffee business in Brazil’s marketing squares is slow. Growers prefer to wait for better prices with the arrival of the new crop in the market. “Regardless of external volatilities, the coffee business remains illiquid, leaving those involved stressed as nothing big happens,” says Marcus Magalhães.

The peeled cherry type had higher trading value today in Espírito Santo do Pinhal (SP) with USD 550.00 per bag and high of 1.85%. It was the biggest swing on the day among the squares.

The type 4/5 hard had the highest trading value in Guaxupé (MG) with USD 538.00 per bag and 0.55% indentation. The biggest oscillation on the day occurred in Poços de Caldas (MG) with advance of 1.21% and bag quoted at R$ 502.00 (USD 2,027.90).

Type 4/5 had higher trading value in the cities of Araguari (MG), Espírito Santo do Pinhal (SP) and Guaxupé (MG), both with R$ 500.00 (USD 2,019.80) per bag, respectively, down 1.96%, stable and high price 1.42%.

Source: Agricultural News