• The market lost ground this morning, though in many ways that was to be expected given the overbought nature of the picture following recent sweeping gains. The bulk of these losses were seen for the spot March’20 contract, however with the OI having now crossed to make the May’20 the largest position on the board the more significant contract to follow has become the May’20. Here the losses were rather more limited with scale buying providing a degree of support as the March/May spread crashed back in towards 0.50 points. Of course this still represents a high value and maintains much of the recent gains, but in an environment where we have seen strong gains against the bullish fundamentals it indicates a desire to pause in order to unwind the overbought technical picture. Values did then recover and work back into positive ground with May’20 reaching 15.24, particularly impressive against a backdrop of new USDBRL lows of 4.38, but these levels were not sustainable and we consolidated back into the range. We continued sideways until the final hour when an aggressive sell-off ensued that sent May’20 down to 14.73, with settlement just above at 14.78 suggesting that we may be sent for some near term consolidation.

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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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