Morgan Stanley Coffee Report

Coffee extended its rally off Friday’s low in a macro fueled march higher.  The market again closely tracked the CRB, which in itself seems largely a proxy for Crude.  The dollar was weaker providing a catalyst for commodities as the Federal Reserve concludes their April meeting tomorrow with no expectation of a rate hike, though the details of the decision will surely cause ears to perk.  KC is mired in the midst of a veritable traffic jam of moving averages on both the KCN and KC2 charts, a testament to the long standing nature of the range.  Robusta remains the more intriguing market, with the keen eye still cast on weather, while Vietnam reportedly continues its torrid export pace.  The sizable call options in that market remain the focus of trader gossip, with 2500 X 1700 2000 CS being put up at a 61 premium, as upside remains in focus.  A hackneyed cliché about quiet before storms would probably be appropriate here, yet ironically precipitation is the last thing an already story parched market needs.