The market soon settled down to consolidate yesterday’s recovery with the early part of the session spent holding the mid/upper 18.50’s. The macro was more mixed this morning though grains were showing strongly and so with little reason to pull back the market shot ahead to 18.89 on aggressive spec buying before looking to consolidate the higher levels ahead of the US-day and more potential spec interest. In fact, the daily 1pm movement actually saw prices retreat a little with some long liquidation seemingly emerging due to a lack of fresh impetus, though the dip was soon picked up and with specs further buying / covering shorts Oct’22 pushed ahead to challenge 19c. Psychological selling initially limited the high to 19.01 but with the macro turning increasingly positive once again the buyers did not relent with the next wave taking Oct’22 onward to 19.15, a remarkable 1.44 points above Tuesday’s low which saw bearish rhetoric aplenty over recession concerns. The move also improved nearby spread values yet further with Oct’22/March’23 reaching -0.07 points intraday while March/May’23 traded to 0.74 points. Relative calm returned over the final hour or so with process content to consolidate near to 19.00, with an eventful week ending at 19.02. The scale of movement over the past two days is akin to that seen during the middle of May when spec buying enabled a rally that proved unsustainable longer term. Again, the current movement is being generated by spec/macro and while it may well continue for the short term there will be sure to be increasing interest from producers at the higher levels to further hedge in case a reversal sees momentum lost and a swing back down through the range.
