The El Nino factor continues to hold sway over the market following the weekend, with spec buyers continuing to generate upside movement on the back of the story. With Fridays COT report showing an expected modest reduction in the new spec long there remains some sway for the smaller traders to play the long side and they did this in spiking Jul’23 up to 25.91 midway through the morning before locking in some profits. This did not mark the end of their efforts though, and additional buying efforts were made through the last morning and early afternoon, encouraged by stories that India will delay announcement of next years export quotas until FH 2024 to allow for any potential weather-related crop reduction to be considered. Highs were recorded bang on 26.00 before a more significant run of day trader liquidation sent prices slipping back into the range, virtually wiping out all of todays gains by mid-afternoon. There was still plenty of movement as prices swung between the 25.40’s / 25.60’s, though by the final hour things had calmed in the vicinity of 25.50. Though the index roll is reaching its end there was another significant Jul/Oct’23 volume of 62,000 lots that ensured the market totals were again respectable, though as this fades and Jul’23 pricing becomes less ahead of expiry the true thin nature of the current environment will become more visible. The close played out just ahead of the lows to leave Jul’23 showing a modest 9-point gain at 25.47 to leave the broad picture unchanged with further volatility within the range seeming likely.
The recent fun and games was being maintained as early trading saw values working higher, reversing some of Fridays late pullback to leave Aug’23 sitting comfortably in the mid $680’s. This steady start in turn provided the platform for a low volume spike higher, Aug’23 rocketing to $695.00 on less than 200 lots though quickly returning to the $690 area as the lack of any meaningful buying to continue the move became apparent. That was by no means the end of the efforts with some spec interest continuing to emerge from the buy side and pushing the price back to $695.00 during the early afternoon, though the disinterest from the wider world in continuing the push remains palpable and a retreat to the range followed. With both spread and white premium volume proving to be minimal the market remained only lightly traded, with the rest of the afternoon seeing prices close into an increasingly narrow band, sitting near to $685.00 as we moved through the final hour. There was little change to this picture with Aug’23 ending the day at $684.60, and the current choppy but range bound pattern likely to continue.
