Wheat
Wednesday's Recap
Wheat futures were slightly higher Wednesday with the Dec contract finishing the session at 578'4, up by 2'4. Overall the session saw 98,356 contracts done, with Dec volume coming in at 57,247. Total open interest decreased by 4,183 (1.02%) to 406,620. Dec fell by 1,935, or 0.95%, finishing at 201,909.
Technicals
Wheat was able to defend support again in yesterday's trade, we've outlined that as 560 1/2-565 3/4. We talked about this being a spot to consider looking at the long side, whether that be reducing shorts or outright long. Prices have made it back to our pivot pocket from 582 3/4-584 1/4. It is "go time" for wheat as we see this as a bit of an inflection point for the market. A failure to achieve consecutive closes above this pocket could spark another leg lower. If the Bulls can chew through and close above it, we would look for a run back to 596-600.
Technical Levels of Importance
Resistance: 596-600, 615-617 1/2, 629 1/2-634
Pivot: 582 3/4-584 1/4
Support: 560 1/2-565 3/4, 544 1/4***
Popular Options
Option trading centered around the March 680 calls with 1,602 traded and the Nov 565 puts with volume of 1,253. In Dec options, the highest volume call was in the 620 strike with 1,274 changing hands, and the 560 put leads with volume of 877. Option open interest is largest for the Dec 600 calls at 7,646, and the Dec 550 puts at 6,400.
Volatility Update
Wheat implied volatility ended slightly up as WVL added 0.1 to close at 30.60, a one week high. The 30-day historical volatility settled up 0.0320% to 25.56%. The WVL Skew was moderately lower with the 30-day dropping 0.16, finishing at 5.87.
Fundamental Notes
- Weekly Export Sales Expectations
- 350,000-650,000 Metric tons
- Last Week: 504k. Last Year: 381K
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