Morgan Stanley Coffee Report

The session started out meandering about rather aimlessly in a +75 to -50 range only to find upward momentum and direction as the real strengthened and the CRB rallied courtesy of dollar weakness.  U.S. stocks rose to record levels as traders pushed back on bets for a 2016 rate hike ahead of this Wednesday release of minutes from the July Fed meeting.  Arabica prices enjoyed a macro related bounce rising 385 points at the high for the day (14420 basis Dec), only to have the rally fizzle back to the brink of new lows ultimately settling little changed on the day in a weak technical performance. With September KC options out of the way Sep/Dec took center stage trading 14,208 times in a range of 385 to 330 under. The pace of the roll has Sep open interest 8,000 lots less than July at the same period ahead of July’s FND.  The lowest close in the Dec contract since the 27th of June, when funds were carrying essentially the same number of longs and the market was trading at current levels.  We wait for fresh coffee centric inspiration, in the meantime the macro arena continues to dictate momentum.