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10-18-2021 Armenia Coffee Report

Good day, happy Monday to all who come here.

A true roller coaster of a week. We started the climb in the early days of the week, only to give most of the week’s gains up by the end. The market showed somewhat overbought at the top, and by Friday was back in the trading ranges for the RSI.

A return to “normal patterns” in the Brazil rains was certainly a stabilizing factor, though the market has other very well documented problems that have yet to be addressed, such as shipping and logistics, in actual fact getting worse in some places. A report came during the week that said that Brazil shipments were down about 26.5% for the month versus a year ago. That report blamed the reduction on available shipping.

Macro factors such as the Brazil Real also played a part. This morning the Real stands at 5.5179 and the Colombia Peso at 3766.5

Stocks in all hands as reported by the Green Coffee Association were down 107, 561 to stand at 6.023 million bags. This is again most likely due to shipping delays causing roasters to have to draw from stocks on hand. ICE warehouse stocks stood at 1,920,410 of which 1,045,720 are Brazils and 747,130 are in Antwerp. There are currently 60,092 bags pending grading. The total is down 22,779 for the week but that’s with a good bump of newly graded coffee in the mid-week.

The disaggregated COT issued on Friday Oct 15 for trading as of October 12 showed that long funds added 3882 lots to stand at 63,617, short funds also bought, 2529 lots to stand at 11,175 lots
short. Trade sold about 2300 lots. Long funds now as long as they’ve been in some time. This goes along with other commodities like crude oil, which is currently trading at 7 year highs.

It’s probably necessary for the market to continue to correct some, maybe flush out some of these new longs, before it can continue much higher. We came within about 3 cents of contract high in December and it would not surprise us to see another challenge soon, just not right away.

We now have some fresh Colombia Excelso and Supremo in Continental. There are some RFA Excelso in now as well. We have some very nice FTO Exceslo from a women’s centered Coop as well in the warehouse. We have a very nice Guatemala HB Quetzeltenango now available in Continental Warehouse. Save some room we have some Bali Kintamani RFA Certified about to go afloat.

How can we be of help today?

All the best,
The Armenia Team