Morgan Stanley Coffee Report - March 23, 2021

​Coffee fell 250 points in mixed trading, settling 127.60.  Prices gyrated throughout the session as spec flows dominated both directions and volume, while not dismissible, was certainly not impressive.  Early weakness was noted from the start as futures were pressured by news of additional lockdowns in Germany – a key factor in a global risk selloff overnight.  KC recovered just after 8am however, and tracked the BRL higher for the following 2 hours, maintaining that familiar correlation trade through the 11:20am EDT high and for another 20 minutes of backtracking.  For unclear reasons that relationship fell apart as the BRL remained around its best levels of the day (5.49 vs 5.48 peak at time of close) and futures took an escalator down to intraday lows (127.45 low / 127.55 last print / 127.60s) with no real reprieve.  As well trod as the 130 / 128 range has been in recent days, a late day axed buyer was nowhere to be found.  The BCOM was down around 1.75% vs 1.92% for coffee so it may have just been a factor of trading one proxy for another with prices at the upper end of commercial interest.  Spreads were weak overall, KN and NU both losing a tick (-2.05s and -1.95s respectively) and the KK 20 points (-8.75s) although not remarkably so – also at the lower end of the recent range.  London meanwhile shed $21 to close 1377 while structure was flat.