There was some opening buying on show which briefly lifted the May’23 price to 20.43, however despite being well positioned to challenge the contract highs at 21.52 the buying then faded which left prices to drift lower. The pace of decline was slow, but the constant nature of the morning slide left prices sitting in the low teens ahead of the Americas day, some 30 points beneath the morning highs and leaving a lot of work for the funds/specs to do to reinstate yesterday’s positive technical work. In fact, it proved to be too much to ask as the drift lower continued down to 20c during the early afternoon before small sell stops were triggered to accelerate the pace of decline. Consumer pricing started to emerge in the 19.70’s which helped the market to stem the fell and flatten out, however the scale nature of the buying meant that there was no bounce, just simply consolidation around the lows. There was some aggressive selling held back for the close which sent May’23 to new lows at 19.63, and while settlement at 19.67 remains above last week’s lows and leaves the recent range intact, the sharp nature of todays move may have some longs questioning the upside capabilities once more. March/May’23 made a sharp recovery today, heading back up through the range to be more in keeping with the general expectation that the tightness will lead to a firm / squeezed expiry. Closing value was at 1.61 points and with open interest having declined sharply again to 35,968 lots it remains likely to be a relatively limited tender.
Higher opening prints were brief as the market quickly followed the lead being set by No.11 with a drift in price that took us away from yesterdays new contract highs. Volume was relatively light as the downward trend built over the morning, the lack of resting buy orders meaning that it was a simple decline based on snippets of selling, though one which was serving to quickly unwind the recent good technical work. With no sign of any support emerging and funds absent from the market the decline continued into the afternoon, only finding some respite once the nearby prompts had registered losses of over $10 as some consumer pricing started to appear. This prompted some short covering from day traders that pulled the price up by a few dollars, however it proved to be short lived relief and prices were sat back around the lows moving into the final hour. Spread values were narrower in line with the nearby weakness, May/Aug’23 into $13.90 and Aug/Oct’23 into $11.70, while the premiums also fell away intra day as May/May’23 traded to $125 though recovered to $128.0 late in the afternoon. There was to be no pre-weekend recovery with the close seeing another set of lows recorded at $561.00, and with this representing the lowest price for eight sessions son the back of yesterdays contract highs there may be some nervous spec longs heading into Monday.
