Morgan Stanley Coffee Report - December 12'17

KC suffered a 7th day of consecutive losses and a 4th day running of increases in open interest amounting to a whopping  19,331 lots.  It didn’t help that the real traded lower for a 4th day, to its weakest level (3.33 $/r) since the 3rd of November as hopes fade for passage of pension reform.  System and momentum driven funds pressured the market to a new low of 11830, which was posted on the close, while intraday gyrations  closely tracked the path of the CRB and Brazilian currency.  The last time KC had back to back settlements below 120 was a string of 3 days in May of 2016, which was followed by a 2 week rally to 135 as funds shifted from short to long 12,000 lots.  While the reference to the price point is interesting, it is merely a reference, in a market that begs for a correction following 8 days of lower high’s, 6 of lower lows and an 11% fall in prices. London in the meantime settled at its weakest level since the 27th of June, 2016 while open interest increased by 942 lots, its first accretion in 5 days .