Grain Markets Firm in the Early Morning Trade

Corn

Friday’s Recap
Friday’s Corn market was mixed with the Dec contract higher by 3’6 to 414’4, a one week high. Overall, 397,402 contracts were traded, with 197,406 done in Dec. Total open interest closed the day at a contract high of 1,689,136, adding 16,175, or 0.97%. Dec open interest decreased by 3,387 (0.49%), to 687,247.

Technicals
Corn futures were able to defend the threat of lower prices last week which for now marks a higher low. Are higher highs next? TBD. If the Bulls can achieve consecutive closes back above our pivot pocket from 413-416 it leaves the door open for a run back at the recent highs and our next upside objective, 425-426 1/2. On the flipside, a break and close back below last week’s lows and first support from 409-410 leaves the door open for a retreat back to the psychologically significant $4.00 level. As mentioned in our interviews with RFD-TV and AgriTalk last week, we lea a little more on the optimistic side of prices but have limited expectations of a runaway rally (though they seem to happen when nobody expects it).

Technical Levels of Importance
Resistance: 425-426 1/2***
Pivot:413-416
Support: 409-410, 397-401 1/4*

Popular Options
Option trading centered around the March 440 calls with 4,337 done and the Dec 400 puts with volume of 6,214. Calls with the highest open interest are the July 450 strike (34,694), and for the puts are the Dec 400 strike (35,697).

Volatility Update
Implied Volatility closed moderately higher with CVL up 0.62, to end the day at 18.78. The 30-day historical volatility ended the session off by 1.94% to a one month low of 15.87%. The CVL Skew finished sharply lower, off by 0.95 to settle at -0.03, a one month low.

Seasonal Tendencies Update
Below is a look at historical price averages for March corn futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results). The chart seems to indicate that November can be a tough time for the market to stage a meaningful rally. Whether or not that plays true this year is TBD.

Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of nearly 54k contracts, trimming their net short position to 17.7k, the smallest net short position since August of 2023.

Wheat

Friday’s Recap
Friday’s Wheat market was lower with the Dec contract off by 2’4 to 568’0. Combined volume was 100,721, with the Dec contract seeing 54,164 change hands. Overall open interest finished the session at a one month high of 433,564, adding 7,550, or 1.77%. Dec open interest rose 564 (0.28%), to 200,652.

Technicals
Wheat futures spent much of last week consolidating between our pivot pocket (support) near 580 and our resistance near 6.00. We like the risk/reward setup to the upside here but understand the chart is still questionable and a break and close below the pivot pocket would be a sign to get out of the way. Options can be a great tool in a market like this to help gain exposure while limiting risk upfront.

Technical Levels of Importance
Resistance: 596-600, 615-617 1/2, 629 1/2-634
Pivot: 582 3/4-585 1/2
Support: 557 1/2-560 1/2, 544 1/4***

Popular Options

The Dec 560 put saw the most traded with 1,445 contracts done. Calls with the greatest open interest are the Dec 600 strike (8,057), and for the puts are the Dec 550 strike (7,616).

Volatility Update
Implied Volatility ended the day sharply down with WVL off 1.4, to finish at a one month low of 28.66. Lower by 1.14% to a one month low, historical volatility (as measured by the 30-day) closed at 23.30%. The WVL Skew was moderately down, off by 0.12 to close at 5.74.

Seasonal Tendencies Update
Below is a look at historical price averages for March wheat futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).

Commitment of Traders Update
Friday’s Commitment of Traders report showed another week of little change on the CoT. Funds were net sellers of about 2.2k contracts which puts them net short 31k.

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