The slide to another set of recent lows yesterday has the market looking over its shoulder toward the 18.45 Oct’22 support level, however there was no immediate downside activity as the new day got underway with some hedge lifting versus overnight physicals. This took Oct’22 up into the 18.60’s during the first hour though once the buying was concluded prices eased back to sit ahead of the 18.47/18.45 support area. This provided the opportunity for specs to test the area as the US Day got underway with their efforts seeing Oct’22 trade to 18.45 and match the mark set on 12th May. A short period was then spent just ahead of this mark but with no additional selling emerging to help the spec efforts a turnaround followed, forcing day trader shorts back out of the market on a sharp pop back to 18.70. The situation then calmed with outright values holding the upper end of the range for the rest of the afternoon, maintaining moderate net gains on quieter volumes. Befitting of a quiet session the close proved to be orderly to leave Oct’22 settling to the upper end of the range at 18.67, while Jul/Oct’22 was little changed at -0.09 points. Overall, it was a day which will provide some encouragement to the remaining bulls out there that the market is trying to bottom in a now familiar area, though the likelihood remains that unless the fundamental picture changes any rally that they are able to achieve will be capped off by producer selling.
