Morgan Stanley Coffee Report - August 11, 2020

Arabica continued is descent, falling 170 points to 113.60.  Day 3 of the index roll saw a notable uptick in volume driven in large part by the spreads where U/Z traded in 45 points to -2.25.  Certs fell another 20,145 bags for an August to date total 177,569, yet so far the market has dismissed the outflows as being a key driver.  While traders have been disciplined waiting for price to come back around the expected re-calibrated lower end of a would be range, size paper interest (2k+) in  the Z 150 C was taken by the market as a sign of potential upside bets starting to filter in.  A note of caution was the MACD cross lower and debates over the destiny of Brazilian semi-washed that overhangs everything.  Robusta fell $20 to 1337, trading a lower low, lower high, negative close.  U/X continues to climb, gaining $12 to settle +46 (+49 high).  First notice day remains 2 weeks distant, leaving plenty of time for that trade to reach its ultimate resolution.