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5-31-2023 Armenia Coffee Report

Good morning,

This report is issued on Tuesday this week as we kept the Memorial Day holiday yesterday. That very important day when we remember those who made personal sacrifices to keep our country safe. Men and women who served and gave the ultimate sacrifice, and Gold Star families who lost dear family members are in our thoughts and prayers.

Well, the market broke after continuing to try and mount a rally to the upside that origin would not allow, looks like funds threw in the towel late last week and now today were headed under important support. The dollar was strong in spite of the looming debt ceiling negotiations, which concluded over the weekend with a bi-partisan deal that is expected to pass the Congress and be signed by the President.

This Commitment of Traders report reminds us why sometimes it’s a flawed report. Though issued on Friday it’s only for trading as of Tuesday May 23rd, and most of the fund based selling was done Wednesday forward so it gives us a very incomplete look at the market today. Long funds bought 1,043 lots to be 33,775 lots long, short funds also bought 975 lots to be 18,878 lots short. Trade was the seller (origin). We think this week’s report will show large scale fund selling unless something changes today or tomorrow (and that is doubtful).

ICE stocks fell to 598,493 on Friday, the lowest level of this year.
Brazilian Real is weaker this morning at 5.03148 but the Colombian Peso is about unchanged at 4439.4

Last week, we advocated that the market seemed “top heavy” needing to correct some of the large spec long before being able to rally again and that’s pretty much what we have here. The break of 18000 could mean we’ll test next support at 17000 but we don’t think we’ll make it that low. The other side of this coin has been that roasters have been behind the market not willing to play in the upper end of the range. We think we’ll see good roaster based buying here and in scales lower.

We’d love to be of help if we can be today.

All the best,
The Armenia Team