Futures prices were called to open around 20 higher initially, however soon a wave of spec selling entered the ring, ticking Dec some 25 lower on the opening, before quickly running down to 51.50 on the re-opening in some local sell stop fishing.
The locals were obviously fishing the wrong water though, and without being able to set off any sell stops, the resting commercial support around 51.50 was enough to short cover the locals. At this point a prominent fund was seen taking prices back initially to unchanged, and then to the 52.30 area where plenty of resistance was found from both commercial option selling and spec selling.
Prices for the most part drifted around the 51.80 to 51.90 area before some lat
in the day October / December bull spreading pushed these two months into the green just prior to the close. Speaking of bull spreading, the Dec / March continued to narrow today, and as we mentioned yesterday the amount of local bear positions in this spread leaves it vulnerable to some quick reversals.
By the close the October closed up 17 at 50.07 going into it's first round of notices tonight, and with just 1481 contracts open this morning, we can't imagine there will be much of a delivery.
Cert stocks are absolutely massive right now, at a record 703,007 bales. We expect that the damage will come on the December delivery when almost all of this stock stares down a 2 cent discount to be taken into March.
Technically the December has begun to stabilize itself over the last 3 sessions after Tuesdays dramatic decline. The broader downtrend continues with support under 51 cents and resistance falling, now at 53.50.
marketing@alchempro.com
