Morgan Stanley coffee report - May 11, 2020

Coffee fell 90 points, settling  110.75 in macro dominated trading.  The dollar rose a hefty 0.5%, the BRL weakened 1.7% to 5.83, and selling hit commodity markets down the board; the BCOM is down a near equal 0.9% to Arabica’s -0.8%, while softs fell 0.84% as a basket.  The Dollar / commodity layover was compelling and while KC held on mid morning better than most, ultimately the path was the same.  Spreads were steady with trading overall a bit quiet.  The KCN VWAP was only 20 points off Friday’s at 111.37, outright volumes were the lowest in 3 days, and total volumes were at a 1 week low.  Another large EFS was noted in KCZ, 2038x with most guesses pointing to Brazil.  London played catchup from Friday, bouncing on the close and gaining $12 to 1198.  Tenders were 0.  Robusta inventories fell 4500 bags, outpacing NY’s 3034 – sort of.  10,325 bags were approved from the pending bucket, which implies a gross outflow of 13,359 bags.  Coincidentally that is the exact count of today’s pending pile.