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5-9-2022 Armenia Coffee Report

Good morning and it’s a beautiful start to the week here in the Northeast. The weather is about to become more “Springlike” which improves everyone’s disposition.

We continue to live in interesting times. The market held the 200-day moving average around 215-216 in July until it couldn’t anymore. Finally, come Friday the market got the hit we thought we saw coming and it was a very ugly day, with follow through today by the same jobbers and algo players that have been dominating trading as late. Volumes remain decreased for the most part.

Another interesting COT saw long funds sell another 1331 lots while sort funds sold 749 lots for a total of just over 2000 lots sold. Trade was of course the buyers.

The Brazilian Real continued with its weaknesses down to 5.12777 as wide as it’s been recent. Colombia Peso also taking a good-sized hit over 4057 this morning as we right this.

ICE stocks in all hands were 1,121,597 with 25,230 bags pending grading.
Covid cases here in the USA and around the world showed marked up tick last week.

This all said if the market is going to stop showing so much volatility, you would expect a little more coffee available to it, and here’s where you would be wrong. It’s still fairly difficult to find any size in good washed milds, Colombia, and even traditional Brazils, and the higher along the quality line or the more along the quantity line you want the coffee, the less likely it is to be there. And of course, the trade is due for more freight rate increases as the summer comes and folks renew their 6-month services contracts, more pain that way is coming.

That said, for now, the market doesn’t care that you can’t find or can’t ship your coffee, it has other things on its mind right now thank you very much. We think this is a good place to pick up a few bags if you’ve been waiting – as Jim Cramer likes to say “declare victory” and find a few bags of some really nicer stuff that might be better priced outright than it was 1-2 months ago because we don’t think it will last long.

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All the best,
The Armenia Team