Good morning and happy Monday,
We’re expecting a little rain and high winds here in the Northeast for the next few days. Hopefully Izwandi has some Mandheling roasted for us to keep us warm!
Now, what do you say about a market that basically traded from 99.90 to 97.40 the entire week. The market seems exhausted after it mercurial run up and equally quixotic run down. The RSI stands this morning at just under 26 and is signaling over sold but it just feels like the market has unfinished business at 95.80, the very start of the run up. Surely there are some stops waiting at that level, does the market have what it takes from here to get to them?
The disaggregated COT tells us the funds sold nearly 15,000 lots up till last Tuesday. Undoubtedly the shorter term players have moved to short but the longer term guys have probably not pivoted yet and may the source of the move to test the lows. Time will tell
Interesting things in the physical market. In spite of a very weak Real, Brazilian coffee prices have not become much more aggressive, in part because there is not much coffee until the new crop arrives in the April/June quarter. Likewise Colombia is completely withdrawn as much of the remaining stock in the country is sold and the local markets wait for the farmers to return in the same April/June quarter. Fresh coffee will be extremely difficult to come by in the meantime, probably more important for Colombia than Brazil. We’re hearing things are tight in Honduras and most of Central America as well, will make any pivot from Colombia difficult.
We like the market down here and think it’s a good place to find some coverage.
We have a few bags of Colombia EP in the warehouse, which we made a very nice delivery. We have 2 full lots arriving on the 18th. We have Guatemala HB NC arriving on the 28th the first of the new crop deliveries. Some new PNG Sigri coffees arrive March 27. As always we have Kenya, Sumatra, Panama, natural Sidamo, a few bags of Tarrazu and Antigua in the warehouse as well as some FTO lots from Indonesia, Mexico, Peru and Nicararagua.
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The Armenia Team