Grain Markets Retreat Following Tuesday's WASDE Report

Wheat

Tuesday’s Recap
Wheat futures were lower Tuesday with the May contract finishing the session at 590’0, losing 2’4. Total volume came in at a one month high of 240,464, with May seeing a heavy 86,313 done. Combined open interest dropped 5,506, or 1.21%, to end the session with 448,247 outstanding. The May maturity added 9.01% (5,506) to finish at 150,200.

Technicals
March wheat futures looked poised for a move towards $6 but the weakness in corn and beans was too much to overcome. The market has found its footing overnight after testing and holding our pivot pocket from 574 1/2-577 1/2. A failure there in today’s trade could put the recent bullish developments on hold as it could lead to a further retracement. All in all, we still remain upbeat on wheat, but we don’t expect it to be an easy trade. The Bulls want to see a close above 596 3/4-599 1/2 to really get things going.

Technical Levels of Importance
Resistance: 588 3/4***, 596 3/4-599 1/2****
Pivot: 574 1/2-577 1/2
Support: 564 3/4-569***, 548 1/2-554 3/4***

Popular Options
The May 590 put saw the most action with 1,323 contracts done. For March options, the 600 calls had the high volume with 2,122 changing hands, and the most actively traded put was the 560 strike with 676 contracts done. Options with the largest open interest are the May 620 call with 11,235, and the March 520 put with 7,443.

Volatility Update
As measured by WVL, implied volatility was moderately lower, dropping by 0.35 to close the session at a one week low of 30.62. Historical volatility (30-day) ended the day at 26.36%, up by 0.0551%, to a one month high. The WVL Skew ended the day moderately lower, down by 0.47 to settle at 5.77.

Seasonal Tendencies Update
(Updated on 2.10.25)

Below is a look at historical price averages for May 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
(Updated on 2.10.25)

Friday’s Commitment of Traders report showed Funds were net buyers of roughly 20k futures/options contracts through 2/4/25, majority of which was short covering. That shrunk their net long position to 90,442. Broken down, that’s about 165k shorts VS 74k longs.

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