Morgan Stanley Coffee Report - April 20, 2021

​Arabica prices rose 255 points to 134.45 while Robusta gained $13 to 1398 as activity picked up overnight.  With 11,444 lots of OI entering the day in KCK, and now a single session left to close down unwanted positions ahead of Thursday’s delivery notices, K/N saw resurgent interest after 4 days of declining volumes.  The prompt spread has been remarkably orderly, settling -2.00 on the day while trading a -2.05 / -1.90 range, all but 10 points of the month to date -2.05 / -1.80 range.   Outright volume in KC was about average, yet Robusta saw an increase in interest with a clear battle for the 1400 line emerging. Around 3200 lots of outright trading in RCN was noted in a 1395 / 1404 band, with the sizeable majority of it trading on the ask, suggesting that while buyers were the aggressor (logically so considering KC’s path and the widening arb beyond 71), a wall of stubborn selling was there to greet them.   The disagreements between the destiny of the certs only grow, yet both structure and flat price in London remain unable to break the bands of volatility.