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3-22-2021 Armenia Coffee Report

Good morning, happy Monday.

Spring came early Saturday morning and wow, was it welcome. Moderate weather fell over our area of the Northeast with sunny skies, moderate temperatures, enough to make you grab your favorite cup of coffee and the dog and go for as brisk a walk as you’ve taken in some time. We love this time of the year here where you can just open the windows of the house or the car and just enjoy what Spring brings to our area.

We hope you’re doing well where you are. Vaccines continue to pick up speeds with many parts of the country expanding the list of those who can get them. There’s a feeling we’re at the beginning of the end of this, and the hope is normalcy, or what will approach it, is on the way. Business picked up a bit as well as roasters looked to pick up some spot/close by coffee as their sales start to come up a bit now. We’re noticing a little more traffic con the roads, in the stores, and on the sidewalks.

On the technical side the market continued with downside momentum through the week ending the week with lowest prices since March 9th. The disaggregated COT issued on Friday March 19 for trading as of Tuesday March 16 showed more selling by funds, though it slowed quite a bit. Fund longs were 45,634 lots (down 92) and shorts were 18,735 (up 2348), so a total of 2440 net lots sold for the period. Our leading indicator, the 5 and 21 day moving averages, crossed on the 17th as well telling us it’s better to play from the short side for now. Other technical indicators are in the middle of the range, saying the market could have some more downside for the next few days. The Brazilian Real really stabilized this week and begins the week at 5.5014. Still, we like the downside momentum for a chance
to buy the market at some point.

Brazil’s EMBRAPA had the following to say this morning:

“The production of Cafés do Brasil is estimated at approximately 46.72
million bags of 60kg for the year 2021. The national harvest of Arabica
coffee is expected to reach 31.35 million bags, while that of Conilon coffee is forecast at 15, 36 million bags. The state of Minas Gerais will be the federative unit with the largest production of arabica coffee, with an
estimated harvest of 20.66 million bags, which represents 66% of the total production of the species in the country. Espírito Santo will be the national protagonist in the production of conilon, with an estimated production of approximately 10.15 million bags in 2021, a volume that also represents 66% of the Brazilian production of the species.”

(We’ll quote anything that has the word “protagonist” in it😊.)

We got some nice new RFA Colombian Excelso EP into Continental last
week. Some FTO SHG Honduras EP are now on the water from our friends
at Beneficio Santa Rosa – should be the best of the season when they
arrive. We also have some RFA/Organic Honduras just afloat now as well.
Please discuss with your trader if you have some interest in these, they’re
bound to go quickly.

How can we help you today?

All the best,
The Armenia Team