Morgan Stanley Coffee Report - Sept. 24, 2020

Arabica recorded the dullest trading day in months, yet captured the elusive-of-late positive finish, closing 111.15 +.65.  Following yesterday’s consolidation signal, futures posted an inside day, the first since September 11 which was coincidentally the last time KC managed a positive close.  The settle was indicative of the day, less than 2 ticks off the VWAP in Dec & March.  Volume was light – the lowest since … September 11th – in total exchange traded futures, and the outright implied futures total was the lowest since Aug 24th.  Price largely took its cue from the DXY on a twitchy FX trading day, with intraday dips in KC lining up with the dollar’s pushes higher.  Weather may have been a factor in keeping new selling at bay as a high pressure ridge is forecast to keep rain at bay for the next 10-14 days with hot temperatures prevailing in Brazil.  ZH gained a tick to -1.70, continuing to tell a different cert story than the narrative does, while ZZ gained 45 points to -6.55.  Certs fell 1122 to 1,103,566.  Pendings rose 2750 (all in Germany) to 10,436.  No coffee was graded.   Z 120 C led the option volume board at a mere 648 lots.  Robusta gained $3 as well, closing 1352. U/X is effectively finished after a long journey, with the single lot of remaining OI trading out at a $58 premium.