Oct’22 slipped back into the 18.50’s during early trading before holding sideways in almost comatose trading for several hours. There was no reaction at all to macro movements which saw energy and grains sectors under significant pressure through this period, and it was with some irony that when a spike lower did occur midway through the afternoon it came against a backdrop of mild recovery with some of the earlier losses being recovered. The fall looked to see a few thousand lots of spec longs closed back out, however it did not lead prices to erode further as some improving scale down interest provided the basis to hold for the rest of the afternoon. Recovery was limited however and by the close Oct’22 was at 18.35, still appearing weak despite the significant losses incurred since reaching 19.59. Light support is now in the lower teens, and while a move beneath that brings the 17.71 low back into view, we would expect to see some more significant consumer buying well before this level is reached.  

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The first few minutes saw Oct’22 trade across a range in excess of $7 wide, and while some buying emerged to bring the price back away from the $530.00 area it proved to be a short-lived recovery with a continuing decline setting in to a low of $529.30. In continuing illiquidity there was a sharp recovery late in the morning which boosted white premium values with the market quickly back around unchanged levels, and while it did not lead to a more positive directional shift it did act to halt the decline. As we set into the afternoon, so prices became confined to a narrower band within the lower $530’s, unspectacular and dull in most ways though it did serve to maintain the recovery in the white premiums where Oct/Oct’22 was holding above $127 and March/March’23 was around $94.00. There was no change to this picture with the close approaching and so a quiet conclusion led Oct’22 to settle around $3 lower at $532.60. This maintains the weeks trend though for the first time there were signs that the market is attempting to dig in and halt the move without heading all the way back to the $520 support. 

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Jon Whybrow

Jon joined CZ in 1991, working in the Treasury department before moving to join the derivatives team in 1994. Over 30 years Jon has built up significant experience across derivatives markets and products, particularly sugar, and is now Head of Flow derivatives providing market execution services for CZ’s global client base. He is responsible for the market commentaries which are published each day on CZ app.

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