Morgan Stanley Coffee Report

While the focus early was on last night’s Brazilian lower house committee vote to recommend moving forward with impeachment, the actual impact on coffee was muted.  An oil led commodity rally provided early strength to KC, while Robusta continued to extend its gains on fresh spec buying.  Early weakness in the BRL would have it’s say in coffee, if only for the shortest of period, pressuring KC to the lowest levels during the session during a short lived decline. Support was found slightly above the 200 day MA (124.09, basis KCc2), taking us to our second day of higher highs and lows, while still lacking conviction.  Certs decreased by a handful of lots, bringing the total to 18,455 bags month to day,  though with the raw number still above 1.4mio bags it seems more and more traders are turning their focus towards other stories, particularly with regard to weather & Robusta. Options were generally quiet as well, as traders seemed content to sit on their positions and await the next trading indicator.  OI dropped 4651 lots as a result of Friday’s option expiration in KC.