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11-30-20 Armenia Coffee Report

Good morning/Happy Monday to all, welcome back from the long holiday weekend.

Holiday weeks, especially Thanksgiving being on a Thursday and folks adding a day off on Friday at least, are mostly uneventful times and that’s what we’d expected to get, but that’s not what happened this time, heck it’s 2020 right?

Monday, Tuesday and Wednesday went off about as expected with many folks preparing for the holiday, trading was inside the recent range with lighter than usual volumes, and not much else going on including in the physical market.

Thursday was Thanksgiving in the USA with traders there celebrating the holiday. However no holiday in Europe and in the afternoon one of the larger trading houses in Europe (and around the world) said that after a preliminary crop survey, they were estimating that the next Arabica crop will be 33% less than the currently one – estimated at 51 this year – so down to about 34 million bags or thereabout.

The opening on Friday saw the market gap open higher and work into the mid 120’s in March before finding equilibrium. There was very good volume traded on Friday, which rarely happens, but this news got traders attention.

We heard mixed sentiments regarding this assessment, from it’s way too early, to acknowledgements that the rain fall in Brazil is behind in some important areas. Those who have followed our reporting know we always say we’d “never expect a trader to speak against his own book” and that seems appropriate here. Time will tell and we’ll hear from more analysts and traders soon we’d expect. We’ve been talking in this report for the last few weeks that rain needs to improve soil moisture around the Brazil coffee area, that still not changed. There’s no telling how much the 2 hurricanes that ran through Central America recently, did damage to the crops there, but there’s no doubt that the infrastructure at least is damaged and could at least delay the crops there as well.

Trading Friday broke through important resistance and so far today it’s just a consolidative session inside the range of Friday. We’d expect more of the same as the market tries to come to grip with the report it got late Thursday into Friday. Owing to last week’s holiday we did not yet get a commitment of traders report, though we’re expecting some more spec based buying – though not as aggressive as the week prior, especially since it’s only as of trading on Tuesday.

Warehouses and our offices are now open and we’re here to help if we can get you something you need fast, please let us know.

All the best,
The Armenia Team