« back to blog

08-24-20 Armenia Coffee Report

Good morning to all,

Last Monday was the low point of the week the market rallied every day for the rest of the week and this morning the market is trying to extend that movement.

Last week, funds were buyers again with long funds buying 2074 lots and are gross long 45182 lots while short funds bought back 1931 lots and remain 17400 lots short for net total of 27682 lots net long as of last Tuesday, according to the disaggregated Commitment of Traders report issued Friday. No doubt, funds bought more lots as the week went on.

Thursday night was the last trading day for Sept outside the notice period, and we saw the Sept/Dec switch narrow into 35 points at the end. This is a reflection of the shrinking amount of certified stocks in all hands at the moment. The total dropped another 15958 lots on Friday to stand at 1,337,492 lots the lowest total of the year so far. This certainly lent to the bullish sentiment of the week.

Technically speaking the market is in the midst of a bullish run since last Monday. Short term overhead resistance rests at 12220 in Dec, then 12700 then 13000. The only caveat to the bull run is the 9 period RSI which stands at 66.94 as we write this report at 9:03 Monday morning and the market stands at 12220. Usually a move past 70 is considered overbought, though markets can remain oversold for some time, and sideways consolidation can be enough to alleviate the overbought condition.

We highlighted the 5 and 21 day moving averages last week and they remain apart with the difference widening. We’d watch that as an indication of the market turning.

Macro wise the Brazilian Real was doing terribly last week trading over 5.65 before correcting some. This morning we sit at 5.5755 a little better. The market hasn’t been reacting as expected to a weak Real last week.

We have some lovely coffees sitting at Continental and we’d love to share some cupping notes, or a sample if you’re interested, just let us know.

All the best

The Armenia Team