Opening gains provided the platform for specs and trade buyers to maintain yesterday’s sharp recovery, and the market accelerated at a strong pace soon after to reach 26.15, a huge 0.67 points higher with barley an hour of trading behind us. Such pace could not be maintained and though selling was not huge at the higher levels there was sufficient volume to encourage a degree of profit taking which sent the price back beneath 26c for the rest of the morning. A period of calm ahead of the US morning was broken by some sharp selling that erased the morning gains in entirety, and suddenly the change of sentiment driven by the latest El Nino stories was feeling less significant, something which makes sense given it is merely a confirmation of the same expectation that drove the price action during April. Of course, the longs have never given up easily in their efforts and so there was a new twist later in the afternoon with a new push up to 26c, however this too failed as the lack of fund interest limits the buying at the higher levels once the smaller specs have loaded up and require additional interest to maintain the move. The resultant correction was rapid, and concluded in fresh lows being recorded as the market approached the close. Around the flat price swings there was another strong Jul/Oct’23 volume seen as the fund/index roll continues, today making up around 60% of the total volume across the front two prompts. Jul’23 settlement was made 10 points lower at 25.38, and while the recent news will likely prevent the market from falling significantly it seems probable that rangebound swings such as those seen over the past two days may continue.
There was early strength for the market this morning with spec buyers continuing last night’s momentum and pushing Aug’23 upward to $700.50 before easing back down through the early range as profit taking kicked in. This set the tone for some nervousness to creep in with spread and white premium values beginning to suffer, a situation which exaggerated around the middle of the day meaning that whites disassociated from No.11 movements where El Nino driven sentiment was continuing to attract buying. This saw the Aug/Oct’23 spread trading all the way back to $2.00, certainly sending a signal that the whites are not bought into the push higher and are more likely to continue within the range. Some moderate liquidation followed during the early afternoon to send the price plunging all the way back to $678.20, and in doing so we saw the spread trade in to just $0.30 while the Aug/Jul’23 white premium was valued around $118.00. That was not the end of the volatility with the market pulling back higher alongside another No.11 push, though as that came to an end so liquidation kicked in to quickly send things south once more. This left the market holding just above the lows through the closing stages, putting yesterday’s sudden sentiment shift in the past as Aug’23 closed at $680.90.
