Morgan Stanley Coffee Report - Nov 24, 2020

Arabica lost another 115 points to settle 115.90 as volume continued to thin out as expected before Thursday’s holiday.  Futures were up early before slowly weakening until 10am, albeit holding yesterday’s low.  A rebound back into positive territory for the following 45 minutes  buoyed sentiment, but it would not last and targeted selling on the closing window sent futures to a low for the day, 115.60, on just over 1000 lots of outright trading in the 2 minute period.  While futures rebounded to positive ticks within 30 minutes, the damage was done and KCH realized a 3rd day of lower closes and lower VWAPs.  Trendline support was held, major moving averages remained away (except the 9 day, which KC closed below for a 2nd consecutive session), and the 1 year 50% retracement emerged as fresh technical resistance.  KC2 also closed down a YoY basis.  Volumes were light, total volume down 4k lots on a 10 day average, and spreads turned over a new low since March of 5286, roughly 900 below yesterday’s measure that was a low until today.  Options saw better action than yesterday, but were still led by a relatively paltry by historical “top of the ticker” standards 811x F 145 C while falling 2k lots in aggregate below the 10 day average.  Certs recorded an interesting report, increasing 9858 bags of Brazil, yet only passing at a 57.6% rate.   Month to date Brazil inflows have totaled 105,533 bags – 36,457 more bags than have ever been in the stock prior to this year.  667 bags of Hondos and 370 Mex left the tape.  Robusta meanwhile was under consistent pressure for much of the day, with commercial selling leading the way.  RCH futures lost $25 to close 1353, while FH backed out to -12, -3.