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Grain markets opened lower to start the week but have been able to find their footing in the early morning trade. What’s in store for this week’s trade?
Corn
Friday’s Recap
Friday’s Corn market was lower with the Dec contract lower by 6’2, or 1.48%, to 415’2. Across all maturities, the session saw 486,153 contracts done, with Dec volume coming in at 247,609. Combined open interest finished the day at a contract high of 1,667,728, adding 1,289, or 0.0774%. Dec open interest decreased by 7,521 (1.02%), to 728,845.
Technicals
December corn futures gapped lower in the Sunday night trade but have stabilized within our pivot pocket from 413-416. We see this as an important inflection point to start the week with 10ish cents of risk on either side. Our bias is pretty neutral at these levels to start the week as we could make a case on either side. The Israel attacks didn’t amount to much and Iran has back channeled that they won’t respond which sent crude oil sharply lower, likely adding to pressure on corn on the Sunday night open.
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 415 put saw the most action with 4,178 contracts done. Option open interest is largest for the Dec 430 calls at 32,535, and the Dec 400 puts at 36,908.
Volatility Update
Implied Volatility ended the session moderately lower with CVL off 0.6, to settle at a one week low of 18.87. The 30-day historical volatility finished the day gaining 0.48% to 18.38%. The CVL Skew closed the day up, adding 0.17 to finish the session at 1.54.
Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of roughly 15k futures/options contracts, shrinking their net short position to 71,499.
Wheat
Friday’s Recap
Dec Wheat futures settled at a one month low of 569’0 Friday, off by 12’4 or 2.15%. Combined volume was 129,178, with the Dec contract seeing 75,987 done. Overall open interest gained 5,293, or 1.31%, to 410,252. Dec added 1,633 (0.82%), finishing at 200,416.
Technicals
Lower highs were marked on Friday and lower lows in the Sunday night trade. With that said, support from 560 1/2-565 3/4 has been able to hold which may offer a good risk/reward setup to the buy side, whether that be short covering or outright long exposure. Last night’s low of 561 1/4 was marked in the first minute of trade.
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 highest for the Dec 680 call (4,287) and the Dec 570 put (2,982). Option open interest is largest for the Dec 600 calls at 8,930, and the Dec 550 puts at 6,806.
Volatility Update
As measured by WVL, implied volatility finished moderately down, dropping by 1.0 to close the session at a one week low of 29.47. Historical volatility (30-day) closed the session at 23.59%, down by 0.52%, to a one month low. The WVL Skew was moderately down with the 30-day lower by 0.13, finishing the day at 6.15.
Commitment of Traders Update
Funds have found a comfort zone in wheat with few meaningful changes over the last month. Friday’s report showed Managed Money net short roughly 29k futures/options contracts.
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