Morgan Stanley Coffee Report - January 8th'18

A gap lower opened the week in both N.Y. (127.90-127.65), and it was downhill from there as the opening print held as the high for the day.  Friday’s COT came in on lower end of expectations showing that funds covered net 9,675 lots as the market rallied 8 cents which served to set a negative tone for the session.  The commercial side saw 5,237 longs liquidated while shorts increased by 2,547 lots as origin hedged into the rally.   Adding to negative sentiment was the dollar index, which following 3 straight weeks of declines. rallied .46%, while the euro correspondingly sank .5%, its largest decrease in 6 weeks.  Friday’s open interest fell by 1,395 lots as recently acquired longs jumped ship. Today’s sell off, settling down 330 points at 125.15, was the sharpest drop since the oft referenced  30th of November, however a bit of solace can be found in finding support at the 40 day moving average of 126.75, basis the second month chart.   Tomorrow’s o.i. will be watched to see if shorter term systems have reengaged on the short side.