In KC, prices began at the highs and remained in a range above 233.00 for the first three days of the report. On the Monday of the report, the market dropped to 223.20 and then bounced back to the mid 230.00 level. Today it broke 230.00 and continued to show pressure. RC was the subject of option expiration on the first day of the report. Worth noting is the FH spread which rallied 25 points on that day to a close of 134. It has since eased to 103.
As KC weakened it also found support as trade bought. The sellers were mostly funds, which included Index, and small traders. Managed money liquidated 6 funds and added 8 new shorts. The weakness was generally attributed to holiday and end of year activity, a mostly weak Real and the easing of shipping costs. However, spreads have been on the steady side for the most part.
The market remains mostly on the weak side but strength is also present. Not much has changed in the fundamental arena. My view is that the new year will show us a different market. For now we remain in light volume and narrow ranges.
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