Morgan Stanley coffee report - June 12

Arabica closed out the week sinking to 97.00, -0.70 basis KCU, holding the lifetime contract low by a mere 30 points.  The day started off well, gaining steam during the overseas hours before trading a day over day high around 7am EDT.  Some catchup weakness from the BRL was  to be expected, however the chart was showing signs of a short term low having been made overnight and risk was primed for a rebound.  By end of the day however, the commodity complex was broadly lower, dollar was +0.67%, BRL -2%+ at its low, the S&P had swung negative, and  spec selling appeared to successfully defend the 9dma.   Option expiration seemed likely to hold prices in place and that they did; KCN came perilously close to the 95 line, settling 95.20 after posting a 94.90 low, and it will be interesting to see if there are any in the money calls abandoned or out of the money puts elected (1199 N 95 P OI entering the day).  Robusta too suffered, slipping $15 to 1212.  Pre-settlement selling was noted driving prices to their low as the weekly marker set to commence.  N/U went out unchanged at -31.  Certs fell again in both markets, but seem to be an afterthought for the moment.  London inventories were down another 87 lots / 14,500 bag equivalent, while NY stockpiles fell 8681 bags to 1,673,403.  4675 were graded overnight, 3025 passed for a gross draw of 11,706.