• We commenced the week firmer and traded to 10.56 during the opening stages before settling back to hold more modest gains. Fridays COT report remained neutral to show funds net short of just 4,795 lots while the USDBRL had weakened to 5.35, and with the currency factor pushing ethanol parity beneath 8c/lb we started to see prices ease back towards unchanged levels, seemingly not because of a desire to sell but rather a diminishing interest from buyers. The afternoon then became something of a mundane affair as prices chopped about within the established range on fairly light volumes. A quiet macro picture no doubt contributed to this lethargy while the rare sight of a firmer USDBRL which recorded an intra-day “high” of 5.2252 diminished any thoughts of interest from producers. May’20 closed in the lower 10.40’s appropriately placing it in mid-range to record a modest gain.
• The recovery for whites values seen Friday evening was not sustained and we slipped back once more this morning, May’20 trading down to $331.70. This brought the May’20 WP value back in to $104 while the May’20 spread values were also weaker than they have been for a while with May’20/Aug’20 into $10.30 premium during the morning. The spread weekend further as the day went on and reached $4.80 later in the afternoon, a sizable fall on daily spread volume of only 3,500 lots. This suggests that either specs are still exiting from the May ahead of expiry or that concerns over the ability to tender in the current environment are unfounded. The reaction in the coming days will provide the answer.
No.11 Futures
