Good morning and happy Monday,
It’s a nice shiny end of winter day here in the Northeast, expected to go into the 50’s this afternoon. We’re about to have another cup of our favorite blend here.
In the coffee world, we’ve finally broken out of the sideways range 105.00/112.00 in May. Disaggregated COT showed that funds bought about 2200 lots, though overall funds are still sitting a bit short. The top of the range has been holding around the 200 day moving average (which this morning sits at 111.67 so a close above that number should prompt the longer term players to accelerate their buying/short covering.
Fundamentally there is nothing coming out of Colombia and Brazil before June, and so the subsequent producer based selling isn’t sitting above the market. We’ve been here already and those who wanted to sell at these prices, already have. There are places, like Ethiopia, where a higher market might bring some coffee in.
On a macro level, the market is focused on the coronavirus known as Covid-19 and it’s effect on the markets around the world. Closing of whole towns in China, schools in Japan, large parts of Italy and Iran, and increasing number of cases here in the USA have markets from the NYSE to crude oil, to currency like the Brazilian Real. 10 year bond yields have fallen to the lowest levels on record just over 1%. These factors should have a dampening effect on the markets it’s touching but so far not the coffee market.
We have a few bags of coffee from one of our favorite Colombian suppliers – Café Lumbus, just into Continental. We’ll have a few bags of Colombia Supremos arriving in a few days (Mar 5 to be exact). We have a new container of Washed and Natural Yirgacheffe Gr 1 in GP arriving tomorrow. We have Brazil 2/3 screen 17/18 just arrived waiting to be picked up by Continental, some RFA 2/3 MTGB will arrive on Mar 8th . Our HB Guat NC was delayed, missed its transshipment and will now arrive on the 17th . A mixed box with some PNG goodies from Sigri will arrive at the end of the month.
How can we help you today?
The Armenia Team