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10-12-20 Armenia Coffee Report

Wishing you a happy Columbus Day holiday this morning. Here in the Northeast its rainy and chilly, classic Fall weather. Leaves have all changed. It’s really very nice, if it weren’t for the challenges of the day, it would be even better. We’re still drinking the same Colombia, Brazil, Sumatra blend here. Good flavor and body hot, helps us wake up.

Interesting week last week. Reviewing the disaggregated COT numbers we got as of Tuesday funds were 46,995 lots long (down 3621) and 17,563 short (up 3192) so funds sold 6813 lots to trade and now stand about 29,432 lots long. After Tuesday, the market set itself up for the serial options expiry on Friday, and the market consolidated around the 11000 strike price. Lighter volumes ensued. Early this morning the market tried to extend gains but was unable to do so and subsequent jobber liquidation has the market testing 11000 again.

From here the market consolidation recently has the averages we follow close to crossing to the buy side, but further erosion like we are seeing as we write this will keep it from doing so. To change direction, we’d need to see the market close above the 200 day ma currently sitting around 11450. We are still keeping an eye on Brazil, who needs to see the seasonable rains of this time of year come and stay. Colombia is about to start the main crop, but has problems getting enough pickers and there’s trouble to import them this year owing to Covid.

Technically the market has support here then 10400, and resistance at 11450 or so. There’s been good trade buying scale down from here. It’s a holiday today in Brazil but they’ve been sellers when the market advances as well.

Please visit the offer list that accompanies this report and see if there is anything that might tickle your fancy. We’d love to talk about the coffee with you or send a sample if you like. We’re also available to talk about forward deliveries.

All the best,
The Armenia Team