Morgan Stanley coffee report - May 8, 2020

Arabica posted a strong end to the week settling 111.65, +2.65 and driving the first weekly higher high, higher low, positive close on the chart since Feb 14th.  The late opening and solo session crammed the day’s trading into an abbreviated window and NY took advantage.  Prices climbed immediately off the opening, buoyed by global roaster buying and technical short covering.  A mid-morning dip in the BRL did little to stop coffee, though excepting another commercial led pop midday it also stalled in momentum, trading in a tidy 111/112 +/- range for the balance of the session.  Indeed the VWAP was 111.57 on outright KCN for the entirety of the day.  June option expiration was fairly uneventful with a June 115 Conversion at flat driving the heaviest volume (225x).  Spreads were firm, rising 75 points from N0 to N1.  The BRL strengthened 1.4%, the DXY fell -.2%, and the BCOM rose .6%.  Certs rose a net 4270 bags as 5225 grading's passed out of 8800 (59.38%, around average performance).  This implies a hidden gross outflow of 955 bags.  Pending's are now 16,565.  London was closed for May Day