Grain markets have found their footing in the overnight and early morning trade. Partly thanks to oversold conditions and a late day headline from Reuters regarding trade.
March 4 (Reuters) – U.S. Commerce Secretary Howard Lutnick told Fox Business on Tuesday that President Donald Trump will reach a middle ground with Canada and Mexico on tariffs and an announcement to that effect was expected on Wednesday.
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Soybeans
Tuesday’s Recap
May Soybean futures finished the day at a one month low of 999’0 Tuesday, off 12’4 or 1.24%. Combined volume was a heavy 389,095, with May seeing 211,927 done. Total open interest increased 10,628, or 1.32%, to 813,701. May fell by 35 (0.0090%), finishing at 389,111.
Technicals
May soybeans took a nosedive lower yesterday, probing below the technically and psychologically significant support pocket from 996 1/4-1000, but ultimately closing just above it. That will continue to be watched closely. Consecutive closes back below this pocket or a close below yesterday’s low and the conversation quickly turns to the possibility of retesting the contract lows. On the resistance side of things, 1024-1030 1/4 is the pocket for the Bulls to get back out above to start neutralizing the technical damage that has been done over the last week.
Technical Levels of Importance
Resistance: 1024-1030 1/4***, 1037 1/4- 1038 1/2****
Pivot: 1008
Support: 996 1/4-1000***, 977 1/4**, 955 1/2***
Popular Options
Option trading centered around the April 1040 calls with 8,393 done and the April 960 puts with volume of 7,820. Greatest volumes in May option trading were seen in the 1080 calls (1,840) and the 900 puts (7,304). Options with the most open interest are the Nov 1200 call with 12,626, and the May 1000 put with 17,175.
Volatility Update
Soybean implied volatility ended sharply up as SVL gained 1.9 to finish the day at 19.04, a one week high. The 30-day historical volatility finished the day losing 2.42% to a one month low of 17.00%. The SVL Skew closed slightly down, off by 0.34 to end at -0.83, a one month low.
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Commitment of Traders Update
Friday’s Commitment of Traders report showed Funds were net sellers of roughly 10k futures/options contracts, shrinking their net long position to 8,209.
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Seasonal Tendencies Update
(Updated on 3.3.25)
Below is a look at historical price averages for May soybean futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).
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