Backwardation is a term used in the commodity market to describe a situation where the forward prices of a commodity are lower than the spot prices. This is typically indicated by a downward sloping forward curve. The relationship between the forward and spot prices of a commodity can be expressed using the formula:

$F = S e^{(\text{Risk-free rate} - \text{Lease rate})^T}$

In this scenario, the risk-free rate (6%) is lower than the lease rate (6.5%). According to the formula, this would result in forward prices that are lower than the spot prices, indicating a market in backwardation. Therefore, the investment manager's analysis suggests that the commodity market is in a state of backwardation.

Choice A is incorrect. The market of the commodity is not in contango. Contango occurs when the forward price of a commodity is higher than the spot price, which typically happens when the lease rate is less than the risk-free rate. In this case, however, we know that the lease rate (6.5%) exceeds the risk-free rate (6%), suggesting that backwardation rather than contango should be expected.

Choice C is incorrect. There's no such term as "upwardation" in financial markets or commodity trading terminology, making this choice invalid.

Choice D is incorrect. It can be ascertained without established forward quotes because we have enough information to determine whether it's in contango or backwardation based on given lease and risk-free rates.