Morgan Stanley Coffee Report

Coffee started out admirably following yesterday’s collapse, aided in part by a commodity complex that was nearly universally higher.  In a familiar pattern, New York traders arrived to little more than a penny range, though trading in earnest began a bit before the usual 8am EDT hour.  Despite a BRL that continues to climb vs the greenback, gaining 1.15% at the time of writing, and a COP up 2% today and 16.71% from the Feb lows, KC continues to stumble, finding support today a hair above the lower Bollinger band.  Volume was not particularly interesting in the outrights, however spreads were active, particularly given that we are not in a roll period.  Z6/H7 alone traded 1000+ times, with other back months also finding significant interest.  The Fed decision yesterday was ultimately an ostensible non-event with respect to its impact on our market, and while the BoJ surprise announcement to hold steady may have been a stimulating factor in early trading, coffee has recently beat to its own drum.  With commercial and discretionary buyers both outwardly content to wait for sub120 levels, and a final print at unchanged (though settle well below), it will be interesting to see whether they get their chance heading in to month end.