Morgan Stanley Coffee Report

Quiet trading dominated the coffee market with pockets of global participants still celebrating the Easter holiday.  Following Thursday’s close on the 200 day MA basis K6, and a COT in line with market expectations, early weakness was understated yet apparent, and it wasn’t until the BMF opened and the BRL strengthened that coffee got moving upwards and away from arguably key support.  The CRB was mixed overall with crude leading more heavily energy weighted baskets lower, while equal weight indicators fared better as a mixed group of commodities headed up, including wheat, nat gas, hogs, the softs triplets of coffee, sugar, cocoa and their friend cotton.  At the time of writing, the BRL has gained 1.3%, as expectations of lower inflation and steady interest rates were reported in the weekly economist forecast by the BCB.  President Dilma has stepped in to offer posts to PMDB officials willing to hold the ruling coalition together ahead of tomorrow’s meeting where the party is expected to formally announce their departure from the government, perhaps finally paving the way for the President’s ouster.  With Robusta reopening, the Germans and Europe at large back to work, and potential big news out of Brazil, tomorrow will be a day to watch.