The market quickly settled to hold a narrow band just beneath overnight levels, and in dull trading the market continued on this same sideways path for the duration of the morning. The arrival of US traders brought in a touch more buying to take the price up to 18.74, however any hopes of a continued rally were then squashed by spec sellers in reaction to the worse than expected US CPI figure. March’23 traded down to 18.41 as selling hit commodities and equities as a whole, though the aggression was short-lived and once it eased so prices were able to recover back to the 18.60 area. With the earlier concerns clearly forgotten the macro proceeded to turn around during the final couple of hours, no doubt to the frustration of the specs who had aggressively sold, taking prices back into the lower 18.80’s once more. As with recent days selling was in place at these higher levels from producers to stall the rally, though it did not detract from an impressive turnaround which also widened nearby spreads again with March/May’23 reaching 0.97 points. The closing stages all played out within touching distance of the highs, leading March’23 to settle at 18.81 prior to some day trader position squaring on the post close.
Moderate early gains were soon eroded with Dec’22 retreating to sit quietly in the lower $550’s, the retreat from contract highs having discouraged specs from buying and leading volume to fall to very low levels. With only a few hundred lots traded at the front of the board, and a mere smattering of odd lots matched across the 2023 positions it became a long morning, and though the Americas day drew some light buying which pulled back to unchanged it did not ignite much interest. News that US CPI figures were worse than expected saw selling appear with specs seemingly reducing some small exposures across the whole commodity sector fell, recoding a low at $549.60 before restabilising and returning to the lower $550’s once more. Always keen to build on an opportunity we saw specs return with new buying over the final couple of hours and swing prices up to fresh daily highs, ultimately leading to a positive Dec’22 settlement level at $557.20. There remains much to do for prices to challenge this week’s contract highs again with near term direction likely to remain closely linked to the macro world.
