Morgan Stanley Coffee Report - May 10'18

A 135 point range in Arabica was (under)achieved between 8:10 and 9:45 a.m. as N.Y. posted a 6th lower high and 5th consecutive lower low yet managed to close positive for the first time in 5 days, at 119.55 plus 80 points.  Open interest has been topsy-turvy over the past two days, with yesterday’s activity accompanied by a drop of 3,245 lots while Tuesday’s 1.15 point drop saw an increase of 2,077 lots.  For the record  the COT reporting week saw a drop of 10,648 lots on a net loss of 520 points in value.  Chalk up today’s positive, albeit not exactly exuberant close in N.Y., to a 1.3% gain in the BRL, which, not coincidentally, put in its first positive performance in 5 days.  Today’s close places the market essentially midway between the 115.85-123.75 settlement range of the April 17-May 2 rally.  The last time the market recovered from a similar rally/ sell off phase was following the Dec-Jan run from 135.20-159.30 when prices retreated to 144.20 then proceeded to bounce to 153.30, a 60% retracement of the pull back. Not encouraging but to look at the glass half full…we are certainly overdue.