Morgan Stanley Coffee Report - August 17, 2020

Arabica shook off a sluggish start, gaining 100 points to settle 117.45.  Early returns were predictably soft as traders reacted to the emergence of  new pending gradings and a second week of net long speculative positioning on the COT, even as futures fell by the Tuesday cutoff.  However, commodity flows boosted the board again as the Dollar renewed its downside trek, falling .27%, and generally low volumes in context of recent trading days aided futures higher.  Cold, wet weather made an appearance in some forecasts and while the trade generally shrugged, it is possible some may have found a buying impetus in the forecasts.  Certs fell another 21,552 bags after the close with nothing yet graded.  Z/H tightened a tick to -1.95 and CSO’s in that contract dominated the option board.  850 Z/H -2.50 Puts led the tally followed by paper demand for the ZH 0.00 Call, 750x.  Robusta fell $6 as well, closing 1378 on the day.  U/X remained firm at +62 with spot OI a strong 15,166 lots.  A range seems to be forming between 1325 and 1400, prices only exceeded 3x since July 22nd’s breakout.