Morgan Stanley Coffee Report

A tremendously dull day was marked in Robusta, with Arabica posting dreadful volumes through 12:30 EDT on a small rally as a strong BRL encouraged an already quite long spec community to add.  However, with London closed, KC dramatically found its mojo as 3000 or so lots in Dec traded in a 2 minute period as prices rallied 300 points, taking out the 3/8ths retracement in the process.  While peak prices would not last through settlement, an impressive +400 day was put in the books as KC2 settled at  its highest level since Feb 18th.  Tomorrow morning’s Conab report, due for release around 8am NY time, should not be an opinion forming event for discretionary traders familiar with coffee, however it remains to be seen if outside forces or algos pick up on potential out-of-line numbers.  The true events of the coming day are the twin decisions of the US Fed and Bank of Japan, which should combine to provide a dynamic macro trading environment.  Reports abound of heavy physical volumes continuing to trade in Brazil with soft differentials.  It now bears watching when this manifests in substantial futures flow.