A wild opening saw May’23 ranging between 24.16/24.50 over the first few minutes before cooling to sit either side of 24.30 on more considered trading. What followed proved to be rather mundane as activity then became confined to the early range, the morning seeing the usual array of spec/algo choppiness but little involvement from the trade. With the May’23 options expiring this evening there was a degree of price movement across the range as the day progressed with a marginal new low established at 24.12, though in reality there was no obvious effort being made to send the market to a particular price level to end the day at, to be expected given how little time the contract has spent around these levels during its lifetime. Funds have been only very lightly involved in the recent movements with the latest COT report showing only a small increase for the net long holding to 211.943 lots, illustrating how the movements have instead been driven by trade and consumer buying. There was a little more of this during the afternoon to keep things firm, though the options held no sway as the day ended with May’23 at 24.44. Sentiment remains positive, with some truly bearish news needed at the present time to change many views, and while there is no current justification for further new highs they cannot be ruled out while the technical picture remains firm.
Aug’23 began its tenure as spot month with a gap opening on the intra-day chat, immediately jumping to $676.00 and seeming set to renew the push higher. Buying continued through the early stages to build upon this early strength but with no such enthusiasm from the No.11 market the price then fell back, filling the overnight gap before drifting along in the lower $670’s. The confirmation of the May’23 delivery had no influence on proceedings, and with buyers a little more limited now that the urgency of the May’23 expiry has been removed, so we saw another dip which extended to $665.00 before consolidation kicked in. Volumes remained relatively light as Aug’23 settled into a range within the upper $660’s that lasted throughout an uneventful afternoon that appeared set to leave prices ending around the lows until some late buying dressed the close to $668.50. Overall, a very quiet start to post expiry life for the market, and a pattern that may be repeated for the coming days as we continue to re-assess after the recent rally. As expected, there were 4,851 lots (242,550mt) tendered against the May’23 contract, details of which can be found below.
