Morning, Happy Monday
Hope everybody enjoyed the holiday weekend…and we also hope the extra day off will recharge the coffee market as well!
Last week featured a furious sell off on Wednesday, just in advance of May futures’ first notice day, which is basically the day all family business with respect to May futures is completed. As roasters have been much better covered than origins, this meant that last minute selling from origin was the feature of the day as futures fell 4c. However, on Thursday the market recovered that lost ground with the crush of origin selling behind us (at least temporarily) and the market finished the short week more or less unchanged.
Some items to bring to your attention:
- Major banks like Barclays, JP Morgan, and ITAU all downgraded Brazilian economic growth forecasts to below 2% based upon weak economic data to date and political uncertainty with respect to fiscal reforms. This does not bode well for the Brazilian currency and creates yet another headwind for the coffee market.
- Speculators continue to drive the market down, taking out what roaster buying there is and leaving potential selling from origin unfilled and therefore still to come.
- Shippers are in some cases “rolled” price fixation (and deferring futures selling) from May to July or September, suggesting that there remains an overhang of additional selling to be done that “should” be behind us by now.
- We saw the first reports of the rosy prospects for next year’s Brazil crop, 6 months earlier than usual. This news story, originating out of Cooxupe in Brazil, should be flagged for piling on and while way premature probably didn’t help the market any this week
- Coffee prices are not tremendously skewed by season but to the extent they are, we are still a few months from the season bottom (June). Of course, each year can vary from this overall average.
Armenia happens to have some spots that recently arrived:
- Some delicate Panama’s
- Really Nice RFA Brazils – Multiple Varietals
- Honduras from the Marcala region (FTO and conventional)
- FTO Sumatra Grade 1 DP
- Top Papua New Guinea from Sigri Estate
- Tarrazu “La Pastora”
Coffees Arriving soon (NJ):
- Sidamo Gr3 Dumerso
If we can help in anyway, please let us know.
The Armenia Team