The macro was again showing a sea of red (albeit some of the losses were only small) and this set the tone for the market to make another immediate drop as opening selling sent Oct’22 down to 18.22. The Oct’22 weakness also impacted the Jul/Oct’22 spread with the front month not receiving the same level of selling and so widening the differential straight back out to 0.08 points. Activity soon settled down and prices held a tight range for several hours, and though the decline had stalled there was no hint that the market was in any mood to work back higher despite outside assistance as the grains and energy sectors staring to move themselves back into credit. Moving through the afternoon the market started to wobble once again as the latest round of spec selling sent Oct’22 down to 18.15, though as with all recent moves the activity was orderly and yet more consumer pricing was locked in from the long side. A mid-afternoon short covering rally pulled Oct’22 back up to the 18.30 area, and it will have provided some comfort to any bulls that remain to see prices hold here through the final couple of hours to at least end the week away from the lows. Settlement for Oct’22 at 18.31 remains weak from a technical perspective as we look to the COT for the guidance on the status of the remaining spec longs, while Jul’22 continues on a steady footing towards expiry with Jul?Oct’22 ending the week at 0.06 points.
