With the continuation gap to 22.00 now filled the market was calmer this morning as early trade saw a retreat into the 21.80’s on low volumes. The morning proved to be a drab affair with the trend continuing sideways, ranging between 21.81/22.00 right the way through to the US day a solid base from which to try and end the month/quarter positively but with no apparent fund/spec interest to drive the market ahead. Spreads were still proving to be contrarian to the wider trend with May/Jul’23 easing back into the lower 0.40’s on further rolling, and with the Americas morning failing to bring any new impetus prices set back once again with a new low at 21.78 seen midway through the afternoon. It all felt rather anti-climactic following yesterday’s efforts, but the funds had a move to make and having nudged back up through the range they let rip with some larger (though not overly sizable) buying to push through 22.00 and into fresh ground. In quick time the market flew up to 22.36, matching the March’23 contract high and marking a double top on the continuation chat in the process. Following some profit taking there was another push towards the highs, though ultimately the market had done enough, and the day ended with May’23 valued at 22.25. A remarkable week which saw May’23 down at 20.74 on Monday leaves the technical picture very strong at contract highs, though with indicators moving to overbought and a double top in place for the continuation chart any pullback could prove volatile with consumer interest unlikely to be significant near to current prices.
The session started on the backfoot and with limited buying to be found at these high levels there were some quick losses incurred with May’23 slipping to the $625.00 area before attempting to find a foothold. The buying only served to delay a movement and so another step lower was made midway through the morning though this came to an end once any long liquidation had concluded as the flat price environment remained thin. With today representing the end of the first quarter there was a desire from spec longs to maintain what strength they could for valuation purposes, though increasingly the biggest challenge to the front of the board was how to stave off the pressure being heaped on the spreads, where May/Aug’23 was being pushed back to $13.00 while Aug/Oct’23 was around a dollar weaker at $14.00. These spreads lost a little more ground as May’23 rolling maintained the pressure into the afternoon, setting a May’23 low at $620.90 before some renewed spec buying arrived to try and dress the market for the quarter end. Their efforts yielded much success as the market not only pulled away from the lows but the surged to a high at $633.10, still a touch shy of yesterday highs but a significant turnaround, nonetheless. There was volatility at the upper end of the range through the final hour as profit taking combined with continued market dressing to leave May’23 settling at $630.30, a strong close to the quarter though with the market increasingly overbought maybe the start of a new month will represent a chance for some consolidation and give the market a chance to take a breath.
