Morgan Stanley Coffee Report - April 20'18

Coffee garnered a first notice day bounce, settling 117.70 +1.45 and posting a higher high, higher low in mostly quiet trading.  Perplexingly after two days of BRL centric trading, coffee ignored the currency and ascended in steady fashion throughout the Americas hours even as the BRL fell to 3.41 and hovered around that level for much of the day.  Dollar strength was likewise shrugged off, however sugar, crude and the BCOM all accompanied Arabica higher.  Brazilian selling was present but modest from our vantage, while middling roaster paper was centered in London.  To that point, Robusta may as well have been closed for the day, as the 1 minute bar chart looked more like a scatter plot than a coherent path of trading.  Prices fell $8 to 1759, remaining ever so slightly above the recent moving averages while structure was steady.  CSO’s were the trade of the day in Arabica, as risk was exchanged in the March 19 / May 19 -235 and -230 puts 1250 and 1000x respectively.  COT to follow.