Grain markets were mixed on Thursday and have been under slight pressure in the Friday morning trade. Here are the levels to watch for ahead of today’s options expiration.
Oliver Sloup was on RFD-TV with Scott the Cow Guy sharing his thoughts on Thursday’s grain and livestock markets.
Corn
Thursday’s Recap
For the fourth consecutive session, Corn futures closed higher, with the Dec contract settling Thursday at 421’4, up 2’4. Across all maturities, a heavy 543,312 contracts were traded, with 287,987 done in the Dec maturity. Total open interest finished the session at a contract high of 1,666,751, gaining 3,419 (0.21%). Dec open interest decreased 10,488, or 1.40%, to 736,696.
Technicals
Corn futures came within a penny of the next upside target yesterday but ran out of gas. We will be keeping a close eye on our pivot pocket through today’s trade, that comes in from 413-416. A break and close back below this pocket could lead to additional pressure. I wouldn’t bank on that ahead of the weekend, but crazier things have happened.
Technical Levels of Importance
- Resistance: 425-426 1/2***
- Pivot:413-416
- Support: 406 1/2-408 1/2, 397-401 1/4*
Popular Options
The Dec 410 put saw the most changing hands with 12,533 contracts traded. Option open interest is largest for the Dec 430 calls at 33,738, and the Dec 400 puts at 36,131.
Volatility Update
As measured by CVL, implied volatility ended the session moderately lower, off by 0.52 to settle at a one week low of 19.47. Off 0.70%, historical volatility (as measured by the 30-day) settled at 17.90%. The CVL Skew was lower with the 30-day off 0.22, ending at 1.37.
Fundamental Notes
- Thursday’s Flash Sales
- 227,600 metric tons (8,960,213 bushels) of corn for delivery to Japan during the 2024/2025 marketing year.
- 165,000 metric tons (6,495,761 bushels) of corn for delivery to unknown destinations during the 2024/2025 marketing year.
- Weekly Export Sales
- Net sales of 3,602,600 MT for 2024/2025 were up 62 percent from the previous week and up noticeably from the prior 4-week average. This was within the range of expectations (2,500,000-4,000,000 MT).
Soybeans
Thursday’s Recap
Jan Soybean futures settled at 1005’0 Thursday, even for the session. Across all maturities, volume came in at a contract high of 526,045, with Jan seeing a heavy 180,125 traded. Total open interest decreased 16,978, or 1.81%, to 920,904. Jan rose by 2,875 (0.93%), finishing at 311,676.
Technicals
Soybeans traded into our resistance pocket yesterday, which we have had outlined as 1010-1011 1/2 all week (the high was 1012 1/4). In yesterday’s report we wrote ” If you’re bearish, you may consider looking at resistance from 1010-1011 1/2 to get some exposure.”. The rejection there took prices back below $10.00 which has led to pressure right back to support from 982-984. If you took a bearish position against that resistance pocket, you may consider reducing/cutting that near support.
Technical Levels of Importance
- Resistance: 1010-1011 1/2*
- Pivot: 995 3/4-1001 1/4 982-984
- Support: 982-984, 972 3/4-975, 955-957 1/4**
Popular Options
The Nov 1000 put saw the most changing hands with 8,149 contracts done. Option open interest is highest for the Nov 1040 calls at 18,974, and the Nov 1040 puts at 19,355.
Volatility Update
Implied Volatility ended the session slightly lower with SVL down 0.19, to close at a one week low of 21.24. Losing 0.0521%, historical volatility (as measured by the 30-day) ended at 16.23%. The SVL Skew ended the day down, dropping 0.089 to close at 0.41, a one month low.
Fundamental Notes
- Thursday’s Flash Sale
- 198,000 metric tons (7,275,252 bushels) of soybeans for delivery to unknown destinations during the 2024/2025 marketing year.
- Weekly Export Sales
- Net sales of 2,151,700 MT for 2024/2025 were up 26 percent from the previous week and 47 percent from the prior 4-week average. This was within the range of expectations (1,400,000-2,400,000 MT).
Wheat
Thursday’s Recap
Dec Wheat futures settled at a one week high of 581’4 Thursday, up by 3’0. Combined volume was 95,230, with the Dec contract seeing 49,883 change hands. Across all maturities, open interest shed 1,525, or 0.38%, with Dec dropping 2,990 (1.48%) to 198,928.
Technicals
In yesterday’s report we talked about it being “go time” for the wheat market with prices against our pivot pocket from 582 3/4-584 1/4. Meaning that it’s do or die, a failure there would mark another lower high which keeps the door open for another lower low and a retest of support from 560 1/2-565 3/4. The Bulls need to achieve consecutive closes above that pivot pocket to get technical traders excited about a run back towards $6.00 and beyond.
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 volumes were greatest for the March 700 call (1,334) and the Nov 575 put (1,223). For Dec options, the 600 calls were the most active with 449 changing hands, and the high volume put was the 560 strike with 263 contracts done. Option open interest is greatest for the Dec 600 calls at 7,676, and the Dec 550 puts at 6,585.
Volatility Update
As measured by WVL, implied volatility finished the day slightly down, dropping by 0.093 to close the session at 30.51. The 30-day historical volatility finished the session losing 1.44% to a one month low of 24.12%. The WVL Skew was moderately up with the 30-day gaining 0.42, finishing the day at a one week high of 6.28.
Fundamental Notes
- Weekly Export Sales
- Net sales of 532,900 MT for 2024/2025 were up 6 percent from the previous week and 38 percent from the prior 4-week average. This was within the range of expectations (350,000-650,000 MT).
Ready to dig in?
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