Morgan Stanley Coffee Report

Caution prevailed ahead of tonight’s pending Brazilian Senate vote that would force President Dilma Rousseff out of office and into an impeachment trial.  The real continued to rally .5% despite central bank intervention to weaken the currency, as financial markets found solace in the anticipated impeachment.  Coffee prices carried on to trade firmer as funds take off short exposure in light of a firmer currency and constructive technical’ s.  The low for the day at 126.85 coincided with the 8 am low of 3.48 in the real but prices steadily recovered in line with the firmer currency running into temporary resistance at unchanged (12870)and again at yesterday’s 12930 high’s. Open interest decreased by another 2773 lots bringing the total to 5974 since May 5th,  paired with a ten plus cent push higher within the same time frame suggests another short covering rally, as the COT seesaw continues.
A steady beat of fund buying encountered status quo and precautionary offers ahead of the 130 strike as managed money,  discretionary paper and small bits of origin take advantage of an 11 cent rally off of last Wednesday’s 11890 low’s.