Morgan Stanley Coffee Report - Sept. 17, 2020

Arabica fell another 185 points to close 118.00, a 1485 point loss with a day left in the week, and the 2nd worst performer on the day amongst major commodities.  Outright volume was similar to yesterday (estimated 18,309 lots in the 2 most active contracts), while spreads took a step back at 18,008.  Prices were heavily influenced by FX during the North American trading hours, although as KC hovered near the high and  a potential move into positive territory on the day a spike of selling sent futures spilling 145 points lower.  The settlement window was driven by sell side flows as well, and while KC went out on the bell without the recent post-settlement selling, it also did so having disconnected from what had been constructive USD & BRL indicators.  Z/H managed to close a tick stronger at -1.65 after trading as low as -1.90, however the 1 year ZZ fell to -6.65, 20 points weaker.  Certs were unchanged, however 1140 bags graded all failed as pendings declined 40 bags; NY added 1100 to the queue.  Robusta continues to trade steadily, falling $5 to 1387.  U/X saw renewed strength with a week left before the end of notice period, closing at 99, +12.  OI is winding down with no new gradings and 111 new Conilon deliveries overnight.  Tomorrow is last trading day in KCU.  Oi there stands at 113 lots.