Early trading took place either side of unchanged before settling down for the market to sit close to 24.00 throughout a dull morning. It was only the arrival of the busier afternoon period which drew any impetus to the market and unsurprisingly it was the long side that was again pursued with Jul’23 being pushed up through 24.14 to record the first life of contract high in a week at 24.30. There seems no end to the potential of the market presently with so little producer selling in place to provide resistance, and despite the lack of fund involvement we still find the trade/consumer buyers and algo’s with sufficient interest to maintain the strength. Nothing moves in a straight lime however and from the highs we saw a sharp correction down to 23.73 as day traders and algos sold longs / went short, the kind of flitty action that is to be expected moving forward regardless of the expectation that the underlying will remain firm. There was no such strength at the front of the board however, with May/Jul’23 coming under pressure through the afternoon and easing down to 0.50 points, an area where it has previously found good support. The later afternoon saw prices continue to move within the range but fail to move back into credit as Jul’23 settled at 23.85, a touch disappointing considering the move to 24.30 though recent weeks have shown that such situations are easily shrugged off and sentiment suggests the picture will remain generally firm.
Aug’23 started the day extremely positively with a push up to $683.80, however the move was again built upon limited buying volume and as things settled down, so the morning became one of quiet sideways trading either side of $680.00. Ahead of the US day commencing in full flow, the market found some buying to take the price up to $687.90, however as with the rally last night there was little traction for the move one the initial buying wave concluded and so the progress stalled. For a while, the price tracked sideways on lower volumes but with the day traders still holding onto longs something was going to give and so a correction back to $678.00 was not unexpected when it occurred. This ought to have put the market back onto the front foot however while the picture remains firm there is still a lack of substance to the buying and so once more long liquidation sent us back from the highs with a slide to the upper $670’s were we once more stabilised. Daye trader/spec activity continues to play from the long side and so the market nudged up through the range during the later afternoon, however there was limited volume and so the earlier parameters remained untroubled, eventually ending a day which at one stage had promised more with Aug’23 at $680.10.
