Morgan Stanley Coffee Report

Macro pressure weighed marginally on coffee in early trading as the effects of Janet Yellen’s recent comments continue to reverberate throughout the global markets.  Japanese manufacturing data dragged the Nikkei down 3.55%, setting a negative tone that would combine with rising OPEC output to induce a European sell off in the pre-American hours.   KC began its unidirectional slog to the lows at 8am EDT, gathering volume as more traders turned their attention to the screens.  A relatively neutral jobs number provided little motivation for the market in either direction, as the change for both current and revised periods exceeded the consensus by the slimmest of margins, though notably outperformed several bank predictions.  All in all an incredibly mundane day for the vast majority of the session, surprising those who thought new month / new quarter position setting could have an impact.  Ultimately, the settlement period would provide fireworks as the day’s high was traded at 1:23pm, and MOC buying, presumably for new allocations, flooded into the market bringing KCK back to yet another 200 day MA close.  Initial March Brazil shipments were reported by Reuters at 2.78mio bags per the Trade Ministry, though Cecafe has yet to release their update and a wise trader often reminds us not to trust the initial numbers.  Of course, alternative wise traders tell us not to trust any numbers in this business!  The COT came in nearly unchanged and on the high side of expectations, with the net non-commercial +19,068.