Morgan Stanley Coffee Report - Oct 23'17

Arabica closed the week on a disappointing note after an encouraging start settling down 160 points at 125.25, after posting a low of 124.00.  European hours were muted yet higher, however as the Americas session commenced the failure to post a new high for the week seemed to send short term long specs to the exit.  Roasters were quiet on the day – indeed commercial traders in general seemed to treat the session as a summer Friday.  Arabica closely mirrored the BRL from 8am EDT onwards, with the DXY closely entangled as well.  Given the recent irrelevance of the currency trade to KC, chalk that up to one of the several surprises in today’s trading.  The COT is likely weighing on the minds of many as traders wait for a recalibration of the short side magnitude through Tuesday’s low.  Options were slow, led by 600 N 100 Puts.  Robusta was more resistant to the selling, settling down $8 at 1965 as structure supported flat price.  X/F led the charge settling one tick off the high at 55 over.  Options were quiet, led by paper buying of 425 H 1900 Puts.