Morgan Stanley Coffee Report - April 7, 2021

​Coffee recorded a lackluster session, falling 10 points to 126.75 in KCK and $5 to 1329 in RCK.  Volumes were below averages on the outright front, though total participation driven by spreads ahead of tomorrow’s traditional commencement of the index roll boosted the nominal volumes.  Markets in general seemed to lack conviction (DXY +0.01%, BRL -0.16%, S&P +0.02%, BCOM  +0.20% around the time of Arabica’s close) and KC was not immune to that.  Most of the trading day was spent yoyo’ing on either side of unchanged, with a midsession pop 1c in the green holding for a short time, aided by a peak in the BRL and a low in the DXY intraday.  With technicals now mixed, traders seemed content to add around the margins and focus on the roll. K/N widened 10 points to -1.95, while the VWAP was a stronger -1.88, and the N/U lost a tick as well to -1.90.  K/K remained bound by the weaker end of the recent range as it slid 30 points to -9.35.  Structure in London performed better, gaining $3 in K/N, settling -20, and $1 in N/U  to -17s.  Feb ICO shipments released after yesterday’s close came in at 10,477,000 bags, down 173k MoM and 569k YoY, breaking a string of YoY increases going back to September, though container backlogs may have had some role to play.