The market continued o0n the front foot this morning with an immediate push up into the 19.50’s, the spec sector clearly determined to try and maximise the current technical strength. Following a quiet few hours we found fresh drive from US based specs with another aggressive push upward, this time extending the price to 19.85 before slipping back against some profit taking. Producer pricing has certainly increased at the higher levels though remains less than many may have anticipated, particularly given the move back to th3 5.35 / 5.40 area for the USDBRL which has increased returns. Having fallen back from the high’s things settled down and the rest of the day played out calmly within the range, ultimately providing a rather subdued end to the week, though with March’23 settling at 19.64 it still represented yet another strong performance to conclude 2 weeks of constant gains. Tonight’s COT report will be viewed with interest to see just how much the specs have added to longs (with plenty more to be added to the total since Tuesday), and while most feel that some form of correction is due recent activity tells us to take nothing for granted.
A gap higher on the opening set the tone for the latest surge in prices and led to a morning of steady consolidation within a $534/$536 band. Funds are buoyant to see their longs once again thriving and in a repeat of many recent sessions the game became to hold the market and provide a platform for the larger US based specs to push things along. Bang on cue the specs did exactly that with the early afternoon seeing a rally for March’23 which extended all the way to $542.00, more than $40 above Mondays $501.30 low and almost $60 above the recent lows from 28th October. Selling was not overly significant on the way higher, and it took the usual array of day trader profit taking to send the market back down into the range. The pullback was relatively small to leave the overnight gap untroubled, and a quieter period ensued as we moved towards the close. The week ended in mid-range, March’23 settling at $538.70, with questions continuing as to how long the current 2-week upward streak can continue before some corrective action is seen. Dec’22/March’23 built on yesterday’s late strength today with a push back up to $31.00, the reduction in selling now the funds have rolled forward allowing physical receivers to take over the narrative. Open interest has reduced to 13,078 as we move into the final two trading days.
