Morgan Stanley Coffee Report - April 27, 2021

​Another day of heavy volume as KC extended its rally to 145.90, +2.55 and RC gained another $21 to 1461 as the active arb settled on the doorstep of 80 cents.  KC has now gained 19.4% in April, reversing the 2nd half March losses and then some.  If prices can extend from here, and with oscillators peaking overbought it is a good question, the chart looks to have clean room to the upside.  The 61.8% retracement of the major 2016 high / 2019 lows (144.43) was eclipsed today, and trendline resistance (144.65) from the March and Sept 2020 highs (and just above March 2021s) was knocked out as well.  However, this seems above all to be a spec driven rally and should it fail to continue, these measures will likely reemerge as stronger points of resistance on the next attempt.  While outright volume in the fronts was slightly below the past 2 sessions, it still came in roughly 5000 lots above the 10 day average, a sign of heavy participation on this move higher.  Spread volumes were also their heftiest in 10 days, unusually elevated for a non-roll period, and the 1 year NN gained 25 points to -6.60 as the roll yield hit -4.5%, the smallest penalty since late February.  FND in London gave little in terms of excitement as no notices were reported.  OI stands at a modest 383 lots in May leaving little room for excitement ahead.