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8-17-2022 Armenia Coffee Report

Good morning and happy Monday to all.

After a slow start Monday and Tuesday, the market leapt higher and kept the momentum going through the end of the week, likely fueled by option expirations. In fact, 59 lots of 227.50 calls, which were out of the money on Friday’s close, were still exercised, not something we see much of in coffee.

If you just watch the certified stock number as it’s reported every night, you missed that somehow, 233,402 bags miraculously appeared in Antwerp. Are these new bags or bags previously decertified and now asked for re-grading is a question likely only a few know the answer to. In any case the total number is less concerning now, though it’s still lower than it’s been in a long time ever, if all the pending pass muster.

Macro saw the dollar lose some strength, meaning both the Brazil Real and the Colombia Peso gained a bit last week, making it harder for origin to be a seller that certainly helped momentum. As we stand this morning BR 5.10898 and CP 4161.1 respectively a little weaker than their high points last week.

COT showed long funds added 1026 lots and short funds bought 1674 while trade sold about 4500 lots.

Brazil exports were down 15% in July with Robusta shipments at historic lows. Green exports totaled 2,476,437 bags the lowest since July 2018. Arabica shipments were down 6.5% to 2,023,747 bags while Robustafellto144,625bags,a64.8percentdecrease. Totalexportsinthefirst7monthsoftheyear were 22,443,793 down 5.9%. Earnings rose to a record 5.23 billion or up 62.4% on the year.

We made it over the 200 day MA late last week but didn’t stay there. 226.00 is the magic number here – a close above would likely bring forward some spec based buying. Support still down around the 210.00 level that’s where the trade has been a buyer. FND is coming on next Tuesday the 23rd.

From our friends at BSR we have some very nice RFA and FTO Honduras SHG just into the warehouse.

All the best,
The Armenia Team