Morgan Stanley Coffee Report

The Arabica market opened on the high of the day at unchanged and proceeded to come under further spec related selling pressure ultimately trading  the low on the close and settling down 265 points, the lowest settlement level since the 27th of June.  A breach of Monday and Tuesday’s lows saw some  systems sell stops triggered, yet the selling was absorbed by short term discretionary specs, as much anticipated industry buying went lacking.  Headlines mentioning the potential for a “weak frost” in some southernmost coffee areas next Monday and Tuesday failed to provide support and came on top of a Brazilian trade house mentioning that better than expected productivity in some Arabica regions could drive them to increase their crop estimate.
London saw the market trade to a 3 week low on September option expiration.  Sep/Nov changed hands 8,700 times between 35 and 31 under.  Post close, the Fed released its July minutes stating “members generally agreed that, before taking another step in removing monetary accommodation, it was prudent to accumulate more data in order to gauge the underlying momentum in the labor market and economic activity.”   The dollar has subsequently weakened and the market awaits further clarity from Janet Yellen at the Wyoming Economic Symposium to be held in Jackson Hole next week.