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12-14-20 Armenia Coffee Report

Good morning,

It’s a wet rainy Monday here in the Northeast – with a chance for some real snow on Wednesday. It’s no doubt now that “coffee season” is in full swing. We’re drinking a really nice Sumatra FTO from our friends at Ketiara in Sumatra, the same suppliers who helped us with the cupping contest last year. It’s really nice!

Another very interesting week in the coffee market. Rains came pretty widespread throughout the Brazil arabica coffee areas, helping to alleviate some of the concerns regarding moisture and the new crop just about to take shape. It was left for the options market to provide some relief. Good outstanding volumes at the 12000 level kept the market supported until expiry on Friday. There was even some thought that the market might make it to the 12500 strike level but a gap higher opening on Friday was quickly met by origin based selling and the market then settled just above the 120’s.

Vietnam announced their shipments last month were down 8.4% and down 3.1% against the prior month (83730 tons). For the first 11 months of the calendar year, Vietnam exported 1.43 million tons of coffee, down 3.0% from the previous year. Revenue fell 1.9% to 2.49 billion dollars.

On Friday, another large multi-national coffee firm issued their best assessment of the coming Brazil crop and their arabica projection was lower even than the one that got the market’s attention 2 weeks
ago. It’s believed to be giving the market some support here this morning.

The disaggregated COT showed spec traders long 34,636 lots down 1569 and short 20,232 lots down 972 lots so net/net the category sold a whole 597 lots. Technically the market is banging on the upside resistance at 12500. The options upswing the market made end of last week kept the averages we use for market direction from crossing and have started to spread a bit now. Support rests 12000 then 11650.

Christmas holidays are coming upon us soon, and now that we’re in the winter weather here in the Northeast we might find ourselves with delays due to weather coming any time. Please keep all that in mind when planning your shipments for the rest of the month.

All the best,
The Armenia Team