Another higher day was expected this morning, with funds lining up once again to buy March on the opening. Commercials are starting to become fairly heavy sellers at present levels, in particularly against foreign growth hedging.
With March being unable to take out yesterday's highs, prices retreated back through unchanged, and in almost parallel fashion to yesterday, moved down to the 54.00 level before again finding good trade support.
Options activity was again heavy today, with volatility remaining very low in reflection of the low underlying volatility of late.
One of the larger merchants was reportedly a buyer of 800 March 54/51 put spreads for 95-100 points, whilst buying approximately 1000 March 49 puts for 13 points.
Another merchant was a buyer of 600 Dec 70 calls for 125. The largest trade of the day was a purchase of 1800 Dec 70 / 75 / 80 butterflies for 35 points cost. Prices edged their way back to unchanged later in the session with spec buying the main impetus.
Commercial selling was a little more active on the close though, finishing active months with losses of between 10 and 25 points. Estimated volume today was fair at 10,578 lots.
No news Wednesday again today, though we can look forward to the latest round of US exports tomorrow. Mind you we won't be holding our breath on that report, with demand continuing to be slow out of the US, which is now the residual supplier to the world and not the first port of call.
marketing@alchempro.com
