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5-03-2021 Armenia Coffee Report

Good morning,

It’s a beautiful Spring morning here in the Northeast. Everything is coming back to life here and it’s just beautiful. A metaphor if ever there was one for our daily lives. We’re enjoying a bright cup of 100% Colombian coffee. Juan Valdez would approve.

Another interesting week of coffee trading here, and a tale of two parts to the week. In our report last week we noted the funds were buying and we expected them to continue, and the COT showed they did so, they did very much so. Issued on Friday April 30 for trading as of Tuesday April 25, the report showed that long funds held 51,261 lots (up 9,266) and short funds were less short at 15,978 lots having bought back 7,949 lots and that equaled a whopping 17,215 lots during the reporting period. That’s as big a position change as we’ve seen in a while. Origin was the other side of the action, taking advantage to sell over 140 in July and Sept. At this point having bought so much, funds were a bit less aggressive after Tuesday and the week changed complexion. Wednesday went sideways while we got an “outside” day on Thursday, clearly on the back of fund selling. Friday and so far, this morning we’ve been trading just over 14000 in July.

Market appears to be moving higher on continued bullish analysis concerning the next two crops now and the availability of coffee during this time. Meantime for now at least, there are still rather aggressive offers coming from Brazil even during the last week. Other origins have been much more cautious and slow to move differentials. There is still difficulty finding shipping containers and available space on vessels. This continues very true for Asian exports, but it’s moving to places like Colombia now where we are noting a step up in cancelled and rolled over bookings. Shipments that must be transshipped are also experiencing longer transit times as available slots on final vessels are not equal to demand. We’ve noted this especially for Central America shipments where transits have taken as much as 8 weeks recently.

Having accumulated this much fund buying recently, the market seems to be due for a correction. A friend suggests 13750 or so and we could see that. We’ll need to see the volume and the speed at which the market gets there, but we’re expecting a correction in any case.

We have some very nice RFA and conventional Colombian Excelso just into the warehouse here in New Jersey as well as some very nice Brazil Mogiana 2/3 screen 17/18. We will have some RFA Guatemala as well as some FTO Guatemala arriving shortly. RFA/Organic Honduras from our favorite supplier Beneficio Santa Rosa are now available as well. How can we help today?

All the best,
The Armenia Team