Good morning and happy Monday,
The weather is turning more spring-like here in the northeast and as more and more of us have access to vaccines here, hope springs eternal that things are heading back to normal, if we could only remember what “normal” is. There is an expectation that we are progressing to a place where demand for commodities in general and coffee in particular, will pick up as we head back to a more daily routine that includes travelling both to work and for pleasure.
On the C market, last week was a mirror imagine of the week before, with each days close a little lower than the day before. Surely the Brazilian Real had a hand in that as the real continued very weak. Though up a bit this morning, it’s at 5.7403 at the moment giving the opportunity for large prices
reflected in Brazilian currency to the farmer, even as the C works lower.
We were anticipating that the weeks action would show funds selling off some of the large long position acquired the week before, but because the report only goes to Tuesday – we didn’t see what we expected to. The COT report issued Friday Mar 5th for trading as of Mar 2nd showed long funds added 2420 lots to stand at 49,717 while short funds bought back 762 lots to stand at 13559 lots for a net long of 35,158 lots. Most of that was bought from trade/origin. Technically the market has completely corrected the rise of the previous week with the market now trading below the Fibonacci retracement 12900 level.
There is still talk of weather and its effect on at least the next Brazil crop and perhaps the one after that. Lots of pictures flying around depending on the author’s point of view you see trees in bad shape, or relatively good shape. Brazil is a big enough country that both can be true and usually is. We believe that the damage is done to the next crop and cannot at this point be undone. In addition, irregular maturation will effect quality. In that vein, we suppose it’s good that Brazil stocks at the ICE warehouses continues to rise now standing at 817,999 bags of the total 1,806,933 though the bulk of them is in Antwerp (613,092 bags).
Colombia reported its Feb production rose 11% to 1,107,000. Exports were 1.3 million bags that was up 18% on the prior year.
Shipping remains troublesome at Asian origins. There was an interesting article in the New York Times this weekend which we will share with you here:
https://www.nytimes.com/2021/03/06/business/global-shipping.html?referringSource=articleShare
We have some RFA Colombians just about to go into warehouse.
We’re here to serve you, please let us know how we can.
All the best,
The Armenia Tea