There was little apparent interest in the market this morning, fatigue following recent price swings limiting participation which left prices to drift along quietly centred around the 19.50’s. Activity picked up a touch with the arrival of our friends in the Americas, widening the range in both directions, the lows recorded at 19.46 being just a point above yesterday’s mark from where we rallied once more. This second push was far more dynamic that that which had gone before, and while being riven by some very modest spec/algo activity we saw the price quickly rise to 19.76 before cooling as a little more selling began to emerge. The specs/day traders then stood back which allowed the market to edge quietly along either side of 19.70 ahead of the 3-day weekend, until the arrival of late buying pushed the price to new daily highs in a quest to dress the valuation. The efforts ultimately achieved little with the 19.81 high recorded prior to the call, followed up by some late selling to leave settlement only just above where we had been sitting at 19.73. Having mirrored yesterday’s range, the market still appears set for more near term consolidation, though the long weekend may provide some influence from London whites and the wider macro before we resume on Tuesday. 

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The market was very quiet this morning with a sense of apathy creeping after recent movements, and this allowed March’23 to drift a few dollars lower. Having reached $536.50 midway through the morning the price action levelled out, leading in turn to a return to the $540.00 area with the recovery made on only 50 lots, such was the illiquidity. What the return to credit did achieve was to encourage a degree of defensive spec interest to reappear, and this set the tone for a more positive showing over the afternoon. A brief return to $543.00 pre-empted a more sustained rally during the later afternoon which took the price back to the upper $540’s, albeit still on low volume due to the lack of selling depth. Spreads also benefited with March/May’23 widening out to $19.10 with the flat price strength reinvigorating the front white premium back to $113.00 from lows of $106.50 this morning. All remained calm until the closing stages when a new high was recorded at $549.40, and while the late volatility meant that settlement was a couple of dollars shy of this mark at $547.30 it maintains a degree of positivity as the market moves into Mondays US-holiday where there will be no No.11 market to cast any influence over proceedings. 

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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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