A mildly positive showing yesterday encouraged some buying to the market this morning with Oct’23 popping back up to 23.66 initially before slipping back to show single digit losses once the buying had concluded. Through to mid-morning the losses extended a little further to 23.31, though with no sign of any significant selling following along the market was able to consolidate and move sideways in front of the lows into the early afternoon. Buoyed by the UNICA news and Indian weather concerns there was some spec interest appearing from the US which took prices up to new daily highs during the early afternoon, attempting to add further gloss to yesterday’s performance though on low volumes. The picture then ignited with a sharp push up towards 24c, again driven by specs as they continue to trade against yesterday’s sentiment change while being assisted by general macro strength and a weaker dollar index. The move extended to 24.00 precisely, knitting perfectly with the chart when initial resistance is provided by the early June low at 24.01. While there was undeniably some profit taking occurring once the rally had stalled, it had only a limited impact and the market was able to trend at the upper end of the range through the final couple of hours. There was also a small directional shift for the Oct’23.March’23 spread on the move as it traded up to -0.08 points, though by late afternoon it had returned to -0.12 points to minimise the daily gain. This spread factor continues to cast doubt upon the sustainability of a rally, and while the close was positive with Oct’23 ending at 23.91 it may be that we are exploring the upper end of the short-term range with a continuation of the positive news likely needed to make a continuation sustainable at this stage.
London whites were resurgent yesterday, led by a squeeze of the Aug’23 contract heading into expiry. There was no immediate sign of a continuation this morning as Oct’23 saw its opening gains erased with the pullback continuing to $654.90 from where a consolidation pattern emerged, values trading the mid/upper $650’s through into the early afternoon. There were supportive noises from around the wider macro which encouraged some fresh buying back to the market during the early afternoon though initially values struggled to make significant gains with a little scale selling appearing around yesterday’s highs to keep things in check and maintain white premiums near to last nights levels. That changed midways through the afternoon when more aggressive buying appeared, talking process through to fresh recent ground, boosted by the wider macro and DXY weakness. Highs were recorded first at $668.30 and then at $670.00, which in turn aided the white premiums by taking Oct/Oct’23 out beyond $142.00. Aug/Oct’23 meanwhile had a calmer day, ranging from $17.00 to $22.90, still very firm and seeing a solid volume of 2,762 lots, particularly considering the Aug’23 open interest figure now stands at just 6,159 lots. There was an element of profit taking seen as Oct’23 closed at $667.70, though this did not detract from a positive technical performance.
