While Oct’23 has become the driving force for the flat price there remains a strong Jul’23 influence over proceedings and the market was under pressure during early trading as the pressure being applied to the Jul/Oct’23 spread set the tone. With few resting orders of any substance, Oct’23 slipped quickly to the 25.50 area before finding a modicum of support, though by now the damage had been down and the short-term technical picture was drawing in selling (both from day traders and also through long liquidation). The later morning was calm with the market attempting to find some kind of base, but with the spec sector not prepared to support it so the downward trend maintained at a more sedate pace with any respite coming on from short covering. The movement was relentless with further spec liquidation taking place as the market moved down towards 25.00, by now with additional assistance from the Jul/Oct’23 spread as it traded into a discount. The macro was also showing as a sea of red and so the pressure maintained all the way into the final hour, with both nearby prompts busting down through 25c. Prices remained at the bottom of the range through into the close, leading to settlement levels at 24.93 for Jul’23 and 24.97 in Oct’23. There remains further room for Oct’23 to correct, with this month’s lows not met until 24.01 should we continue to correct back down through the range.
Over recent weeks the whites have proved to be consistently reluctant to rally at the same pace of No.11, with both this and the failing structure that has seen spread values narrowing significantly suggesting that prices were topping out. With the macro weaker and No.11 slipping the Aug’23 duly plunged following todays opening to emphasise this situation, losing more that $10 during the first 30 minutes before uncovering a degree of buying. Consolidation followed, though with the Aug/Jul’23 white premium back in to $116 and the Aug/23 spreads already trading several dollars lower there seemed to be little prospect of a reversal in fortunes. Prices dipped a little further during the late morning period, though surprisingly having descended to the mid $670’s a little more support was uncovered, allowing the white premium value to begin ticking back up. Aug/Oct’23 recorded a low at -$7.40 midway through the session, and with consumer support continuing to be seen ahead of the early June lows the market was able to maintain a broad consolidation pattern which lasted through the rest of the session. As the afternoon wore along there was also some assistance being provided from the Aug’23 spreads as bargain hunting pulled the differential back up to -$3.00, though the flat price remained near to session lows. Additional spread buying into the close led Aug/Oct’23 to settle at -$2.50,while Aug’23 ended at $673.90.
