Morgan Stanley Coffee Report - May 3, 2021

​Arabica closed the week with a strong performance, 138.50, +2.35, while Robusta gained $8 to close 1416 as both markets saw heavy volume on the breakout.  Futures were in quiet ascent early with the Dollar index a tailwind as technical buying carried prices.  While not an uncommon driver necessarily, the DXY appeared to be an unusually strong catalyst for KC on the day as prices marched in lockstep for much of the session.  A triple failure to extend gains convincingly through 140, peaking at 140.20, ultimately led a pullback as KC decline from 9:50 to 10:35 with rare room for the longs to breathe.  However, somewhat remarkably, rather than maintain negative prices Arabica reengaged with FX proxy trade and rallied for the balance of the trading day with scarce pause.  On a weekly chart KCN now has 3 weeks of impressive higher highs, higher lows, positive closes following the April 9th weekly outside reversal higher.  Spreads also performed well in aggregate; while NU was unch at -1.90, the NN gained 20 points to -7.25.  Robusta KN went out unchanged at -29.  First notice day is this coming Tuesday, April 27th, leaving Monday the final opportunity to clean up unwanted positions.