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Good morning,

We hope you had just as nice a weekend as we did here in the Northeast.  Really wonderful spring weather allowed us a chance to get outdoors while social distancing.  Much needed here.

The market started off with the same sideways action it ended the previous week with.  Volumes picked up in the C market but that was mostly due to switch trading ahead of July’s first notice day (June 22, 2020).  The end of the week saw the funds pick up their aggression in selling down the market and we made new lows for the move, and that continues this morning.  The disaggregated COT shows the funds added about 7300 lots as of Tuesday’s trading, and we think that unless something happens to change their intentions, they will add a like to slightly higher number when the next report comes out on Friday.  The market will remain under pressure if they continue to want to add shorts, the trade will not force the market higher.

In the news Brazil shipped 2.7 million bags of coffee in May 2020, down 27% from the record 3.5 million bags they exported in May 2019.  Overall, shipments in the 19/20 crop year are at 33.2 million bags a 4% drop from 2018/19.  Vietnam shipped 2.2 million bags in May down 10% from the previous year.   For the coffee year exports are down 3%.

We continue the process of re-opening the country state by state some more progressed than others.  As we progress, all in the coffee market are hoping for some pick up over time.   As reported, the grocery part of the chain was doing fairly well, but the other parts including hospitality, sit down restaurants and cafes and convenience stores were severely hurt. 

Coffees at origin are seeing differentials hold to increase as the market falls but the asking prices remain static to increasing.  Colombia is still in tight supply here in the USA as the Mitaca starts to flow but there are waiting buyers for what shows up and competition for the raw coffee remains intense.  There remain reports that at least one major player in Colombia is very late on shipments right now.

In Brazil, the Real showed some stability last week, and so it made it harder to be aggressive on sales.

We’re here and hoping you see a pick up in demand for which we can be of help.  We do have a little less than a box of Colombia Supremos afloat and arriving on June 30th.   These can be RFA Certified if you need them to be.  Speaking of RFA we have some nice Brazils in the warehouse ready to go.  We also have some Costa Rica Tarrazu recently arrived that can be RFA as well as conventionals now in Continental.  If you need some milds we have fresh HB Guatemala just in the warehouse.  As always, we have some FTO Mexican, Nicaragua, Sumatra and Peru in the warehouse.  Conventional stapes such as Panama, Sumatra, Brazil 17/18 screen are available as well.  One little spotlight I forgot to mention we have 88 bags of Organic Supremos just arrived into Continental.