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7-17-2023 Armenia Coffee Report

Happy Monday,

Sweltry weather here in the NY area after big storms again this week. Perfect time for iced coffee, colder the better.

A mostly sideways market for the week as it consolidated the recent fall. Specs were still motivated sellers with trade still on the other side. With June inflation reported around 3% the macro was negative for commodities.

COT issued on Friday July 14 for trading as of Tuesday July 11 showed long funds added 2647 lots to stand at 23,699 lots but the short side did nearly twice as much selling 5644 lots to stand at 37,041 a very big number considering they likely added some more as the week went on.

ICE warehouse stocks stood at 545,203 and drawdown has completely stopped for now it seems. There are 2483 bags pending grading

There have been a total of 719 notices issued against the July C, which will expire this Friday.
The Brazilian Real is 4.83240 about unchanged for the week, Colombia’s Peso is 4062 a little stronger.

The estimated world coffee production for coffee year 2022-2023 will reach a physical volume equivalent to 171.3 million 60-kg bags. Of this total, 98.6 million bags will be of the Coffea arabica species, which will be equivalent to 57.5% of the world crop, and, in addition, 72.7 million bags of the Coffea canephora species (robusta+conilon), which will correspond to 42.5% of the total calculated for the same period. This world coffee production performance, if confirmed, will represent an increase in production of approximately 1.7% compared to the previous crop year.

In relation to consumption, in the same period under review, also at the global level, projections indicate that the planet will demand the corresponding 178.5 million 60kg bags, which, if confirmed, will represent a modest growth of 1.7% compared to coffee year 2022-2023. However, as can be seen from these estimates, if total production is compared with world consumption, there should be a deficit of approximately 7.2 million bags in coffee year 2022-2023 on the planet.

The statistical data on the performance of coffee growing worldwide are based on the June Coffee Market Report of the International Coffee Organization (ICO).

And from Brazil’s Cecafe: Brazil shipped 35.626 million 60-kg bags of coffee in crop year 2022/23 (July- June), a 10.2% decrease over the previous year, according to new figures release yesterday by the country’s Council of coffee exporters (Cecafé). Exports earnings were flat at $8.1 billion reflecting a higher average export price per bag.

Exports of all forms of coffee fell 17.2% to 2,639,960 bags. Green coffee exports were 19% down to 2,292,823 bags, of which 2,062,170 of Arabica and 230,653 of Robusta, down 23.3% and up 60.5% respectively.

We still like the market here with the growing spec short interest, it becomes harder and harder in our opinion, for them to get out of once they stop selling.

How can we be of help today.

All the best,
The Armenia Team