Morgan Stanley Coffee Report - October 26'18

A dreadfully boring day went out under duress, the victim of predatory selling and Brazil hedging ahead of the nation’s election this weekend.  Arabica closed 119.75, -1.40, taking out yesterday’s low by a single tick (119.25) during the settlement period, allowing for an outside day before snapping back higher, trading around 120 into the end of the day.  This caps off a questionable performance on the week, as KC traded its first lower high, lower low on the weekly chart after 4 consecutive weeks of pure ascent.  While the market favored candidate Jair Bolsonaro seems all but assured to take the helm of the Brazilian government, a growing chorus of traders wonder if his victory has been priced in, leaving room for weakness in both the BRL and coffee come next week.  Robusta closed up $23 at 1720, even after it too was the recipient of end of day selling.  Nov notices clocked in at 3047 lots.  Managed Money pared bets on all sides of the London market with longs liquidating 987 lots, shorts covering 5388, and spreads falling 1859.   Commercial positions also fell dramatically as heavy switch positions drew down into notices. 
 
COT net non-commercial position came in well below expectations (-51,983).
 
Enjoy the weekend!