Morgan Stanley Coffee Report - January 21, 2021

Coffee rallied 125 points, closing 126.45 while recovering most of yesterday’s losses.  For a second day a wave of selling emerged to interrupt otherwise quiet trading, though today’s effort was both smaller in size and lesser in impact.  After a steady climb higher in the overseas hours futures maxed out for a second time at 8:30am, forming a rough intraday triple top following 7am and 8am pushes to 127.30/127.25/and finally 127.30 again.  Short term specs took this as a sell signal and prices chopped their way lower for the following 2 hours before finding support just around the YTD VWAP (124.55).  KC ignored a weakening in the BRL en route to a rebound over the final 3 hours of trading and a final print of 126.70.  Both futures and spreads (-2.05 HK, -9.50 HH) remain largely in the recent range.  Certs rose 14,205 bags to 1,571,125, on a 75.6% pass rate.  Robusta wasn’t able to keep pace, falling $17 to 1323 and spreads losing $2 each in the front 2 spreads (H/K -12, K/N -15).