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2-13-2023 Armenia Coffee Report

Good morning and happy Super Bowl Monday,

It was an exciting game going down to the last seconds. Congratulations to the KC Chief fans out there. Now time for therapeutic coffee this morning to help us get going. Keep the coffee flowing…

Last week was a sideways week with the market testing but not breaking support down in the lower 170’s and resistance just under 180. Good volumes were more reflective of fund switching from March into May, and the switch stayed +/- 50 points of even which was interesting considering the volume traded. Last week we saw just a little more origin participation, especially Colombia as their currency was a bit weaker, encouraging business. Brazil was still mostly quiet.

News from Brazil: Brazilian farmers will produce a good crop of arabica coffee this year, but it won’t be the bumper crop some had hoped for because of bad weather in late 2022, according to Carlos Augusto Rodrigues de Melho, president of Cooxupe, Brazil’s biggest coffee cooperative. Bad weather also hurt the 2021 and 2022 crops, and 2023 could have produced a record crop if the weather had been better, he said. Conditions in the fields are excellent now, and the quality of this year’s crop should be good, but it won’t be as big as the 2020 crop, de Melo said. It’s still too early to forecast just how big the crop will be, he added.

ICE Warehouse stocks totaled 874,654. There is no coffee pending grading at this time. Brazilian Real at 5.19635 and Colombia Peso 4797.4 both about unchanged from last week.

In interesting news, we noted we did not get the COT for the end of last week. Surprising but things happen. Again, this week the ICE stated that technical errors from one major supplier of the information keeps them from posting the data. This is not good. 2 weeks of trading and we have no idea what funds have done with that very large short position. We’ll see how long this takes to correct – hopefully soon.

Technically the market is in a holding pattern, and we need a break of the above support/resistance to find some direction. We’re kind of partial to an upside break but time will tell.

We’re quickly selling out of the fresh Colombia that just arrived. It will take some time to get some more once they sell out.

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All the best,
The Armenia Team