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6-7-2021 Armenia Coffee Report

Good morning and happy Monday.

We’re having a heat wave, a tropical heat wave…

It’s indeed warm here in the Northeast, we finally have warmer, seasonable weather here as June starts. Time to switch to the iced coffee blends, get some naturals in there to bring the berry!

The short last week gave us a bit of consolidation, which the market really needed. Funds were still good buyers, but origin were their equals selling aggressively as well.

The Disaggregated COT came out on Friday 6/4 for trading as of Tuesday June 1st (with one less day of trading owing to the Monday holiday). It showed long funds again added to their positions ending at 60222 up 865 lots but shorts were lower at 15,355 down 2224 meaning funds bought over 3000 lots. Trade eagerly took those up. ICE warehouse stocks ended the week at 2,096,713 a record for the year. Brazil is by far and away the biggest growth now at 1,143,402 bags. There are 120,815 bags still to grade.

This morning we see the Brazilian Real as strong as it’s been in some time standing at 5.04541 as we write this. Colombian peso 3610 at this time. Apparently, there is a very large OI in calls (over 20,000 lots) from 1.6000 to 1.8500 which could fuel a rally before they expire on Friday. Those could really add to volatility this week.

Overall, we got a good portion of the consolidation we were expecting. The next few days will likely dictate the next move in coffee, we’re expecting that another bullish move is in the offing.

Shipping miseries continue throughout the world with Asia origins worst hit, but Colombia still in the throws of civil strife continues unable to ship from it’s main port in Buenaventura. Two other ports that were working some, Cartagena and Santa Marta, are really suffering now from the congestion there. We’re now having real troubles booking cargo in Brazil now as well. Expect this all to get worse and lasting, before it gets better.
We did get a few bags of FTO and a socially responsible women’s supported Organic out this past week. We have some RFA Brazil 2/3 available as well. We just shipped a container of RFA certified Ethiopian Sidamo 4’s as well, though it will take some time to get it here. We have FTO Guatemala waiting on the warehouse to pick up, in addition to some really nice RFA/Organic and RFA certified SHG Honduras from our friends at BSR who really do a good job.

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All the best,
The Armenia Team