• Yesterday’s late decline knocked the impetus out of spec buyers with the market experiencing a flatter morning on low volumes as traders assessed the impact of the move. Light buying then emerged during the later morning to pull May’209 up# to 14.90 ahead of the No.11 opening, however there was no follow on buying and we soon set back into the narrow range once more. Throughout this dull action there was some movement for the March’209 spreads which were pulling back some of yesterday’s losses, though with May’20 now showing an OI of double the spot month this is becoming less significant. What is relevant will be next Tuesdays option expiry and it was interesting that when light spec liquidation sent nearby values lower midway through the afternoon (March reaching 14.89 and May 14.50) there was a burst of defensive buying that swiftly pulled the spot back above 15c. The closing stages saw prices pulled around within the range, ultimately ending lower ahead of the US holiday weekend to provide a little more relief to the overbought technicals.
  • Tonight’s March’20 whites expiry is anticipated to see in excess of 400,000mt delivered, following the fall in March/May today with the spread expiring at -$5 discount. Details will be published by the exchange on Monday.
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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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