There was early buying to being the week positively, as Jul’23 was bid up to 25.94 during the first hour with longs looking to take the price above 26c once more. Friday’s COT report showed that the funds continue to take a watching brief of current activities with another week of only small movement leaving the net speculative long position at 215,702 lots (-2,588 lots), and the rest of the morning served to suggest that we will see a similar position when the next report is published. Prices eased back to be limping along near to unchanged at the end of the morning, and though a spike down to 25.58 followed there was an immediate reaction and short covering sent the price back up to drift along in the 25.80’s. In amongst the quiet futures market there was some noteworthy activity taking place for the options, with more than 11,000 lots having traded for the Oct’23 22c put, with a single trade buyer behind the activity. Moving through into the late afternoon there was a small pick-up in the flat price which led to new highs during the final 15 minutes with a small spike to 26.05. Settlement was made at 25.99 to show moderate gains with continuing range bound trading anticipated.  

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A higher opening to begin the week was quickly wiped out with Aug’23 falling back from an initial $715.40 to sit near to $711.00 for most of the morning. Volume was lower than ever with only odd lots changing hands and though activity picked up with a spec led nudge down to $706.70 just after noon the dip was brief and short covering following to take prices back into credit. With so few resting orders the market rallied to $713.70 before falling back to again sit near to $711.00, the only further movement through the next couple of hours being a further correction in the price to the $710/$709 area. The lack of buying that left the flat prices drifting here had an impact upon the Aug’23 spread and premium values with Aug/Oct’23 back at $10.60 while Aug/Jul’23 gave back some of the recent gains as it eased to $139.00 while barely trading. Following further slow trading there was a late push back towards the daily highs which resulted in a steadier settlement level at $712.90, while the late buying also recovered some of the lost ground for the spread as it closed at $11.90. 

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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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