Morgan Stanley Coffee Report - January 7, 2021

Arabica staggered to a positive close, settling 20 points higher at 121.10 for the first time in 2021.  Futures were strong for the early session before FX began dragging prices lower and discretionary traders largely stood aside looking for better entry. With that said the market posted its 3rd consecutive lower high and low and it’s second day settling below the Mid Bollinger for the first time since early November.  The real eye catcher however was the heavy selling post settle; nearly 700 lots flooded in as prices spiked lower at 1:14pm, and the final print was 119.60, just above the 119.35 low recorded on that sell down.  That selloff was far and away the heaviest volume of the day.  The index roll / rebalance will kick off tomorrow with reference levels set today.  London lost $20 to close 1336 on the day, dragged lower on what appeared to be arbitrage selling.