Morgan Stanley Coffee Report - March 1'19

Arabica began March on a high note, closing above the dollar mark for the first time in a week at 100.20, +175.  Early Americas hours gave no indication of what was ahead, with a familiar arrival of selling at 8am EST, and for much of the morning KC tracked its commodity complex cousins.  A blast of buying showed up at 12:12, right around intraday highs, and convincingly drove prices to their highest levels in a week, ignoring deepening BRL softness.  Little willingness to counter the flows materialized, and with Brazil off for Carnaval to start next week, one wonders if this is an opportunity for longs to breathe.  Spreads were heavy, eclipsing 28k lots, with both K/N and N/U clocking in at over 8k lots a piece, and U/Z around 4500.  Robusta remains a drag, marooned in a $40 (sub 2c!!!!) range since the Feb 11 selloff, and having set the high and the low of the that range on Feb 14/15.  RCK closed 1534, -3 on what amounts to utter disinterest.  For those surprised by London’s “strength” as KC withered away, we now have countervailing “weakness” that in the end amounts to a whole lot of nothing.