Good day. We hope this message finds you well.
Last week’s 5 trading sessions would best be described as consolidation of the downward move from 13545 to 10905. So far the market has found support around 11000 and overhead resistance above 114.50.
The disaggregated COT issued on Friday Sept 25th for trading as of Tuesday Sept 22nd showed pretty much what we expected. Funds decreased their gross and net longs, and apparently a short fund got a little shorter. Numbers were as follows: 55,999 lots long (down 6734), 11,583 short (up 680) for net of 44,416 lots long (down 7414). We would not be surprised to see more of this this week.
In the meantime, it remains overall dry in Brazil. There has been some rain as Brazil starts to emerge from the typically dry winter season, but much more is needed to overcome low soil moisture levels. Outlook for the next few days is dry, however.
ED&F Man issued an interesting report at the end of last week that expected that we could see another consumer build up of personal stocks as the Covid-19 outbreaks accelerate again in Europe, and continue to expand here in the USA. Here states continue the process of re-opening businesses and returning to schools, in what has best been described as imperfect systems and situations. Over 311,000 new cases reported in the last 7 days here in the States, according to the CDC website, updated Sept 27.
In the macro the dollar was stronger last week. The Brazilian real was out over 5.50 again trading at 5.5307 as we write this and the Colombian Peso out to 3844.0
Total ICE coffee warehouse stocks ended the week at 1,102,436 the lowest level of the year. 10,436 bags were pending grading.
From here we expect the market to again test support at 11000 and eventually break it testing the 10400 support, all things being equal.
Attached to this report you’ll see our offerings for this week. Please let us know if we can send you samples or talk about future deliveries.
All the best
The Armenia Team