Morgan Stanley Coffee Report - January 4, 2021

Arabica closed the day 126.15, -2.10,  as new year flows proved to be negative at least for a day.  Early returns were strong elsewhere in the ag complex with KC the lone decliner as the traditional pit hours kicked in. While  the low was found around 9:30, a macro turnabout put the brakes on any would-be climb higher – of the 9 commodities in the BCOM AG sub index only 3 were still positive by the time KC closed, though 2 of those 3 were sugar and cotton, co-softs that one would think would see similar basket type flows.  Perhaps Friday’s December grading appeal was the unique input along with the covid and political issues that ended up dragging global markets – it certainly did not help fundamental trader sentiment.  Volume was above average as one would expect with the new year flows.  London suffered less on a relative basis, falling $14 to 1360.  H/K was a mere $1 weaker at -10.  Neither market saw much change in structure. Jan tenders remain stuck at 1636.