There was some nervousness being shown as early market activity saw the price pushed down to 20.51 on solid volume, the lowest level traded since 3rd March, though finding some support against the 20.45/20.52 congestion of end Jan/Early Feb highs. A quick recovery to sit in the 20.60’s followed, though buyers remained cautious with the air of vulnerability caused by this week’s losses hanging over the market. Last night saw the COT report data for 28th February published, and it showed a maybe unexpected decline in the fund/spec long position to 183,048 lots (-14,777) despite a weekly rise in futures prices, suggesting that this movement was attributable to the March’23 expiry strength/tightness rather than a spec push. With the market failing to gain any more traction as the morning progressed so prices started to creep lower once more, with some light sell stops being triggered as new lows were recorded, albeit they were mopped up by some reasonable trade/consumer scale buying. Having reached 20.41 and with the scale buying continuing lower there was something of a bounce with short covering taking May’23 back to 20.68 early in the afternoon, though once that was concluded the malaise resumed and prices returned to drift along in the 20.50 area. There was no more movement until the final hour when spec sellers gave a new push at the lows and printed the market to 20.39, though that proved to be as far as the market would move before position squaring took place once again. The closing stages then played out either side of 20.50 with the day then ending at that exact price, another weaker performance though better than may have been expected this morning in the context of the wider macro and suggesting that the fund longs are not yet prepared to throw in the towel.
Opening selling was absorbed relatively easily and the market settled down to consolidate a small way higher through the first hour with longs looking to support prices above $580.00. This was a solid showing in comparison to the No.11 and so led white premiums to gain a couple of dollars (May/May’23 printing up above $127.50), although as the morning progressed so some of the enthusiasm waned, possibly due to macro driven sentiment with commodities generally slipping. This led prices to explore beneath $580, and the move proved to be orderly with no sell stops found, May’23 extending to $577.10 but the healthy nature of the long-standing fund positions meaning that there is no reaction while the market remains around current levels. The picture stabilised with some light buying returning prices back into the low $580’s for a while, however with concerns as the global financial picture ever present there is a reluctance among many potential participants meaning that low volume rangebound trading took over once more. Though the later afternoon saw another push towards the lows we remained within the morning range, providing the opportunity for a closing push based on defensive buying/short covering to leave May’23 settling at $580.40, while also strengthening the white premium to new daily highs, May/May’23 valued at $128.50 going out.
