Following a mixed opening period, the market settled down to see some calm trading on which prices edged slowly higher. The move lacked any significant spark, feeling as though the direction was being driven more by sentiment against the continuing spec long holding than any real conviction, though the light buying still proved sufficient to take March’23 up to 19.99 just after midday. Knowing that producer scales remain above the market there was a slide driven by long liquidation early in the afternoon which sent the price back to the lower 19.70’s where we sat ahead of this week’s lows for a period, playing the same range for a third consecutive session. This extended a little lower with some day trader exploration taking the price down to 19.58, but with no stops in place and most longs content to hold onto their positions a return to the range swiftly followed. Nearby spreads were weaker as you would expect from a low volume environment with March/May’23 back to 1.22 points and May/Jul’23 at 0.62 points, though this still represents stability for the near-term structure which will likely prevent the flat price from falling too dramatically. The final hour proved to be uneventful, the day petering out quietly with March’23 settling at 19.68 as we conclude another day of range bound activity.   

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The market saw quite a lot of volatility during the early exchanges with March’23 seeing a $6 range during the first 20 minutes of trading before settling down to sit either side of $550.00 for the rest of the morning. Having tipped marginally back into positive ground ahead of the Americas day there will have been some disappointed long holders when some moderate selling soon followed in, sending prices tumbling back down towards morning lows. This damaged nearby white premium values with March/March’23 working back down the current range to $111, though such was the spot nature of the volume that there were no such problems down the board where levels were quietly steady. Further new lows were registered as the afternoon progressed, reaching $544.40 before recovering against short covering. March/May’23 moved back from its $14.50 low against this short covering and as we moved through the final hour prices were sitting calmly to the centre of the days range. Some light selling returned ahead of the close to leave March’23 settling at $546.50 with more range bound activity anticipated for the coming days. 

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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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