Futures continued on firmly this morning in the E trade session, with the entire board around 30 higher initially, albeit on almost no volume. The open outcry session opened around these same levels circa 54.20-54.30 in March. Prices immediately caught a bid tone as the short specs continue to be squeezed out of March.
The March / May spread as expected stayed firm, with March trading in excess of 2 cents premium for most of the session. March has now 16,524 contracts open interest as of this morning, and with just one trading day before tomorrow evening's first notices, all traders await eagerly who will be the issuers and stoppers of March delivery.
Meanwhile the market kept firm, having briefly touched lower soon after the reopening, the March soon touched off into recent highs at 54.70 before some commercial selling kept it in check. May managed to get as high as 52.80, but again proved an inability to break free of Marches shackles.
In the end the market see sawed a little towards the close, with March tracking back near unchanged before a swarming of market on close buying out of the funds saw March close some 50 points higher at 54.50. Volume was high today, though well off last week's record setting levels with a combined 28,482 lots trading.
This weeks spec hedge report has been delayed until tomorrow morning due to the Presidents day holiday, and it is with some intrigue that we await this position. Over the past week the specshave been rolling their overall shorts forward to May, though with open interest declining significantly, we can assume that many traditional shorts have been simply liquidating shorts. We can expect the net spec position to be a touch longer, say 4-5% net short.
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