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10-24-2022 Armenia Coffee Report

Good day,

It’s a rainy Monday morning here in the NYC area. We have a pot of Colombian we cupped end of last week on the warmer. Good acidity, nice and lemony in the back end, excellent body. Yum.

What a week that was. 7 straight days of new lows heading into Friday. RSI just above 17 and now we’re at 13 month lows. We still think the market was driven by macro forces with the dollar very strong in anticipation of the Fed continuing to raise rates, owing to strong inflation here in the States. Folks continue worried about demand destruction that would occur in a Global recession.

We really wanted to see the COT this week and it delivered. Fund selling was the key to last week’s action with long funds selling 11,210 lots according to the supplemental COT now they are 23,472 lots long. Short funds were also good sellers with 7558 lots sold to now be 18366 lots short their largest position in some time. We haven’t seen funds this active in quite some time. Trade were the best buyers taking over 22000 lots.

Stocks in all hands in the USA fell 71,608 bags to 6,378,478 bags in September as reported by the Green Coffee Association of NY.

ICE stocks also fell to their lowest level this year 390,577 bags in total. 646 bags are pending grading.

Weather in Brazil continued with beneficial precipitation throughout most of the coffee areas. In Indonesia excessive rains are hampering production.

Brazilian Real currently at 5.24197 and the Colombia Peso at 4915

We still feel the market is in very oversold territory at this time and at least requires a correction back near 200.00 possibly higher. Funds will likely have to be motivated to reverse their recent selling to get that done.

We have very nice fresh deliveries of Brazil 2/3 Scr 17/18, Colombia Excelso and Tarrazu La Pastora for your cupping pleasure if you are so inclined, please talk to a trader.

All the best,
The Armenia Team