Good morning and happy Tuesday that feels like a Monday to all.
Weather is hot and humid here in the Northeast. Iced and Cold Brew are the preferred options of the day here, more ice the better.
The market made it’s highs early in the week. Afraid of forecasts for colder weather, in a traditionally tough time, before a long holiday weekend there was good fund based buying to start the week off.
There were reports early Thursday morning that some cold did find it’s way into limited Brazilian coffee areas, mostly Parana, but the “all clear” was promptly posted after that as farmers looked at their fields at first light and liked what they saw. Thursday then proved a turning point for the market and Friday and this morning we found ourselves heading lower.
The COT issued Friday for trading as of Tuesday June 29th showed long funds bought 3323 lots to go 59429 lots long, traditionally a large position. Short funds also bought 1043 to go 21463 lots short. Who sold all this, origin of course who took advantage of the rally to sell into it. The Brazil Real found it’s way back over 5.00 and this morning sits at 5.12821 with the Colombian Peso at 3741.2.
ICE warehouse stocks stand at 2,171,324 bags after a good one day drawdown over just over 17,000 bags during the week stopped a trend of every day making high volumes for the year to date. There are 35449 bags pending grading, seems the flow has ebbed at least for the moment.
The market itself got a bit over hyped for the cold weather last week and the subsequent depression after nothing, once again, happened bringing us to a crossroads for coffee. There is a small gap 14905- 14885 left from the last move up the bottom of which should provide support. On the good news front, coffee is definitely moving in Colombia now that the unrest has ended, for now. Most think it will take about 2 months to fully catch up with outstanding/late shipments, but things seem to be moving a little quicker than that to us. Shipment difficulties still remain in Asian ports, it’s impossible to get a container at traditional rates. Even at 2x the price you have to hope someone has a container for you. Logistics still prove challenging, especially if your container requires a transshipment or two.
We still like the market long term; short term might see new lows in the next days.
We have a few bags of FTO Colombians coming into Continental any time now, some fresh in the warehouse RFA Brazils and Organic Honduras.
We’d love to be of assistance, just tell us how.
All the best,
The Armenia Team