Morgan Stanley Coffee Report

The week commenced with a resilient performance in coffee, as New York closed at its highest level of the year and funds continue their buying spree.  London went along for the ride to settle at a 5 week high while both markets close at the same time for the next 2 weeks due to the change to daylight savings time in the U.S.. The response to Friday’s COT report, which showed the funds to have covered net of 13,000 lots, was expressed as negative but the reaction was muted as the market only retreated 160 points at the lows, coincident in timing to the 3.63 low of the day on the real.  The pullback in the real was shallow, and follows its biggest two week gains in seven years, as continued deterioration in Brazil’s economy overshadowed speculation that the protests over the weekend demanding Rousseff’s impeachment would help in accelerating the process.  Certified stocks fell by 9,000 bags, a draw of 55,000 bags over the past 3 days alone and sure to be the topic of highest interest at the NCA conference being held later this week in San Diego.