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10-19-20 Armenia Coffee Report

Good morning and a happy Fall Monday to all of our friends and colleagues.

An interesting week last week saw the market try both ends of the range, but in the end stay within the 10400/11450 range we mentioned last week.

The disaggregated COT showed the following reported Friday, for trading as of Tuesday Oct 13: Long 45,579 lots (down 1416) and short 18,616 lots (up 1053). So, all in all funds sold 2469 lots. Momentum has definitely slowed here and while the 5 and 21 days moving average in Dec is dangerously close to crossing to the up side, so far it has managed to narrow, but not do the cross.

According to Safras & Mercads, Brazilian producers have already sold about 64 pct of the 20/21 crop (as of Oct 13). That pace is higher than reported in the previous 5 years. (average is 53 pct during that time). Brazil also announced that during September they exported a record 3.79 million bags of 60 kgs. That volume is 8.6% higher than last year, same period. Revenues were 457.9 million, about 3.6% higher than the previous year.

Good discussion continues about the amounts of rain and how beneficial it’s been to this point. Our opinion of what we’re hearing we need to see rains continue over time to help make up for the deficits incurred to date.

Colombia’s exports for September were 886,000 60 kgs bags down about 12% from the previous year. Total exports to date 2019/20 coffee year are 12.623 million bags down 6% from the 13,489 million in the same period one year ago. Production during the month was also down at 995,000 down 9% from the 1.088 million same month last year, though total output for the now finished 2019/20 crop year at 14.1 million is 2% higher than a year prior.

The NCA issued a report that “The pandemic has not changed how much coffee American drink, or how often”. The story is here if you’d like to read it: https://www.comunicaffe.com/the-pandemic-has-not-changed-how-much-coffee-americans-drink-or-how-often/

That’s it for now. We’re going to watch the market for a sign of a break of support or resistance, or a cross in the averages we watch.

Please take a look at the offer list that accompanies this report and let us know if there’s anything we can help you with, or to discuss booking future deliveries.

All the best,
The Armenia Team