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9-20-2021 Armenia Coffee Report

Good day,

It’s a beautiful day here this morning. I want to call it a beautiful fall day as it’s cool and crisp here, but fall only officially starts tomorrow, so on a technicality we go with that. Coolness means a hot cup of Joe goes really well to start our day. What are you having this morning?

Markets around the world in a bit of a frenzied state over a possible large default in China by developer Evergrande who has looming deadlines for debt repayment. Currency, commodities, and stock markets all lower this morning. To put this in perspective we heard this default compared to the Lehmen Bros default that started the 2007/08 recession here in the USA. Dow here is called over 500 lower as we write this report.

Another relatively quiet and sideways week in coffee with little to note. Volumes continued on the lower side daily. There’s some talk here in the USA that consumption is down more than has been reported and roasters are finding their coverage lasting longer than expected. That contrasts with dry weather calls for the Brazil coffee areas, although there is call for more moisture as September ends and October starts. It’s needed.

The disaggregated COT illustrates the point of a boring week. Long funds sold about 1837 lots to go 51,145 lots long while short funds bought about 139 lots to go 14,148 lots short. Trade overall bought about 500 lots (buying 1101 lots while selling 631 lots).

Warehouse stocks were relatively quiet as well standing at 2,164,372 bags of which 1,155,385 are Brazil of which 855,384 bags are in Antwerp. There are currently no bags pending grading.

Brazilian real out as wide as it’s been in some time at 5.31921. The Colombia Peso is at 3831.3

The market remains in a range of about 180.00 to 190.00 and when things get as dull as they’ve been lately, the market tends to drift lower. Macro effects such as this China based default can have outsized effect on the market in times like this.

We have a fresh box of Brazil 17/18 just arrived not yet in warehouse, and some RFA 2/3 mtgb as well. Some fresh Colombia Excelso EP arrive in NY tomorrow and Supremos arriving on the 23rd. Colombians seem to go really fast so talk to us if you can use a few bags.

How can we help you today?

All the best,
The Armenia Team