Morgan Stanley Coffee Report

First notice day came and went with 129 lots tendered effectively within the same clearing house.  Overall futures were quiet as KC managed to backfill yesterday’s gap during its early slide to the lows during the European session.  A lack of enthusiasm was palpable even during the slow ascent from 8am EST onwards, until a spike of buying at 9:33am arrived, coincident to a similar move in crude.  It appeared as if an allocation of some sort came in, with spikes in sugar & other markets shortly thereafter.  The BRL widened back to 310, and in what could best be termed strange happenstance, KC and the currency tracked each other closely throughout the day with a positive correlation (as opposed to the normal – and more logical – inverse one). 
The COT is one of the more interesting ones in recent times, as non-commercial longs added 3199 gross longs and 5569 fresh shorts … arriving at a near consensus +17,511 net long but in a manner far from expectations.  Meanwhile commercial longs fell 11,551 while shorts also covered 13,765 ahead of first notice day.