Trade in the July prompt contract last week broke down and through the previous lows established in March, similar to the action in the May and June contracts when they became prompt. Last week’s breakdown was immediately supported back up to previous resistance at $1.86 before decline into the weekly close. The July trade is met with weakness early as the prompt month (usually either side of Memorial Day) consolidates finding its footing for a rally in the middle of the month (usually between the 14th and 20th), but rarely extends it’s mid – June rally into expiration (the last time was in ‘16 before that in ‘12).
While the prompt is showing weakness, the continuation of prices remains in the recent range between $1.70 and $1.90 and last week stayed within the high and lows of the previous week. It did break below the trend line from the May daily lows, which suggests additional declines early this week (see Daily). Monthly volume declined in May for the second straight month, suggesting a lack of enthusiasm for dramatic lower prices. The lack of volatility is beginning catch my attention but remains neutral.