Good morning,
Yesterday saw the market drop again only to recover the earlier losses to settle in the plus column. The market had opened 8 points weaker only to quickly recover back to unchanged. However, as the macro weakened selling soon took prices down to new lows. The weakness continued through to the early afternoon as prices slid slowly towards 19 cents. However, good support was noted in front of the level which, eventually, triggered some day trader short covering which allowed prices to pull off the lows. Further fresh buying appeared which quickly pushed prices back to unchanged in the last hour of trading. Eventually, the market settled with slight gains on the spot month with the rest of the board still in negative column. The HK recovered by 6 points to end at +101 while the KN was 1 point firmer at +60. In London, it was quiet with the structure ending slightly weaker with HK at +7.90 and the KQ at +13.60. The WP eased with HH WP finishing at 101.30 and the KK WP at 93.40. Further long liquidation saw prices drop to their lowest level in nearly three weeks before the selling dried up allowing prices to recover although still ending some 110 points below the highs reached on 16th November. A recovering macro also probably helped the recovery.
The delayed COT as of the 22nd November showed the funds/specs had increased their net longs by 36,914 to 168,539 during the period when prices pushed to their highest level since April before falling back and ending over 50 points down on the reporting period. The non-commercials increased their net longs by 34,846 to 121,503 which is their largest net long position in a year and was probably another 15k lots higher when the market hit the highs. The commercials increased their net shorts by 40,530 to 374,019 as producers took advantage of the high prices to price as was to be expected. The Index funds increased their net longs by 3,617 to 205,478. The funds net long position is probably large enough for the time being so it would seem unlikely they will increase unless there is a bullish shift in the fundamental picture.
This morning the market opened 14 points firmer mainly on the back of a positive macro picture and the fact the COT was as expected. Prices soon slipped back and, currently, around unchanged. The HK and KN are both unchanged at +103 and +60 respectively. In early London trading, the HK is slightly weaker at +7.70 while the KQ is also weaker at +13.30. As mentioned the macro is a positive picture this morning with most commodities trending higher while the USD Index is weaker. The BRL ended slightly stronger last night at 5.37. Having dropped back to near 19 cents yesterday and found good support it would appear the market will now look to consolidate at current to slightly higher levels. The structure remains firm which will also add to the support. Whether the market can improve back to above 20 cents remains to be seen but with the funds now holding a large long position they may be happy to hold and wait.
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Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 02547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2025 ADM Investor Services International Limited.
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