Morgan Stanley Coffee Report

Following Friday’s surprisingly bullish COT report, the market reacted almost logically with a 350 point rally, and then, as has been the case with recent pops, gave the whole thing back…and then some.  The bounce ended with prices bucking up against the 14280 downtrend line of resistance, off of the November 8th election day high of 18165 basis the May contract.   Momentum faded as short term specs and jobbers took advantage of the best intraday rally since the 23rd of January, with little else to nourish it than a bullish read on the COT report. The week over week change in the net non-commercial position was the biggest swing (-4.73%), since the week of December 6th , while funds carry their smallest net non- commercial position (long 3,488) since the week of June 7,2016.  The gross short fund position stands at 42,876 lots, and is the shortest it has been since  last May and more interestingly, a record gross short while holding a net long position.  That mentioned, a lot hinged upon a reaction to the COT report, which ultimately proved burdensome, if only to be underscored with the low print for the day at 13750, violating Friday’s low and printed on the close.