Morgan Stanley Coffee Report

KC posted what some were calling a historically interesting day as what appeared to be a technical rally ran through growing, though still modest, Brazil selling and a general attitude of disbelief from much of the trade and discretionary fund community.  Notable was the statement of concern regarding commercial cover in robusta by a wide margin amongst traders who initiated the topic, though the upside pain on an arbitrage basis in KC has likely been more stress inducing.  Perhaps it speaks to the generalized disbelief amongst many that KC belongs at relatively lofty short term levels given the perception that Brazil is primed to initiate selling of size, while the balance sheet in robusta going forward causes far more heartburn.  The last time KC2 posted a settlement above 150 was February 20, 2015, while the last close over the same round number in an ascending market was Feb 18, 2014 during the drought rally.  Initial jobless claims were a non-event ahead of tomorrow’s ballyhooed Non-Farm Payrolls number as the parsing of both data and statements grows in anticipation of Fed action sometime in 2016.  With the intraday move ignoring recent correlations such as the BRL, Sugar, and Crude amidst excellent volume, and the aforementioned jobs number coming in front of a three day weekend, one does not expect tomorrow to be holiday-esque.  ICO shipments were released for July coming in at 7.75mio bags, down 22% year over year.