Morgan Stanley Coffee Report

The Western hemisphere awakened to news of a deadly terrorist attack in Brussel’s airport  with at least 31 people killed and 200 injured.  The dollar caught a flight to safety bid and commodities initially fell under pressure but coffee quickly rose to the top of the CRB as momentum buying remained intact.  Open interest increased by another 2,127 lots on yesterday’s action indicating funds remain fully engaged on the buy side.  The real initially weakened to 3.65 but reversed course following President’s Rousseff’s comment that she will  never resign under any circumstances. Ex-president Lula’s appeal of the decision to suspend his ministry appointment  was rejected, causing the real to strengthen 1% to the 3.5750 highs scored last week. The “risk off” positioning from the Brussel’s attacks was balanced by positive sentiment as developments in Brazil  were viewed as increasing the odds of impeachment.  Coffee prices rallied into the close to trade to the high of the day at 13490, 10 points below Friday’s 13500 high, courtesy of the late push higher in the currency.