Grain futures were weaker in Wednesday morning but found support and rallied through the session. That strength has led to buying in the overnight and early morning trade with prices inching closer to resistance.
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Soybeans
Wednesday’s Recap
Wednesday’s Soybean market was mostly lower with the Jan contract adding 2’0 to 1003’6, a one week high. Across all maturities, a heavy 409,986 contracts were traded, with 208,308 done in the Jan maturity. Total open interest added 17,143, or 2.03%, to 862,296. Jan increased 3,526 (1.00%), finishing at 354,552.
Technicals
January soybean futures tested and held support from 980 3/4-986 like a champ yesterday. Not only did the market defend it, but it rallied back to close above our pivot pocket from 995 3/4-1002 1/2. This keeps the door open for a move to our 4-star resistance pocket from 1018-1023 3/4. A close above here and the market could have some runway to work with. The next upside objective on the chart would come in from 1049-1052 1/2.
Technical Levels of Importance
Resistance: 1018-1024 3/4****, 1049-1052 1/2***
Pivot: 1006-1008 3/4
Support: 995 3/4-1002 1/2***, 980 3/4-986, 973 1/2***
Popular Options
The May 900 put saw the most traded with 7,487 contracts done. Largest volumes in Jan option trading were seen in the 1040 calls (2,904) and the 900 puts (4,193). Calls with the most open interest are the March 1100 strike (13,974), and for the puts are the March 980 strike (21,773).
Volatility Update
As measured by SVL, implied volatility finished the day sharply lower, dropping 1.9 to end at 20.24. Down by 0.75% to a one month low, historical volatility (as measured by the 30-day) ended at 13.91%. The SVL Skew ended slightly higher, gaining 0.18 to finish the session at -0.31.
Fundamental Notes
Weekly Export Sales Estimates
- 1,200,000-2,200,000 Metric tons. The previous report showed net sales at 2,273,300 MT for 2024/2025 were up 6 percent from the previous week and 39 percent from the prior 4-week average.
WASDE Estimates
- Yield: 52.8 Bushels Per Acre
- Production: 4.557 Billion Bushels
- US Ending Stocks: 532 Million Bushels
Seasonal Tendencies Update
Below is a look at historical price averages for January soybean 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 friendlier time of year, but recent counter seasonal trends likely have traders looking at this chart with an extra grain of salt this year. The upcoming election undoubtably has played some sort of a role in this.
Commitment of Traders Update
Friday’s Commitment of Traders report showed Funds were net sellers of roughly 12.5k contracts, putting them net short 72k contracts. A bearish stance but far from being “over extended”.
Wheat
Wednesday’s Recap
Dec Wheat futures settled at a one week high of 573’2 Wednesday, adding 0’6. Across all maturities, volume was 122,495, with Dec seeing 67,945 traded. Total open interest ended the day at a one month high of 446,538, up 3,250, or 0.73%. Dec open interest shed 464 (0.24%), to 194,859.
Technicals
December Chicago wheat remain mostly range bound between 560 on the downside and 580 on the upside. Yesterday’s reversal came on the back of a higher low VS the October 28th/29th lows which does help the possibilities of carving out a low here. Consecutive closes above our pivot pocket from 582 3/4-585 1/2 would confirm this and likely spur additional technical buying with the next upside target coming in from 596-600.
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
Option trading centered around the March 620 calls with 1,481 changing hands and the Dec 560 puts with volume of 2,455. Options with the largest open interest are the Dec 600 call with 8,232, and the Dec 550 put with 7,746.
Volatility Update
As measured by WVL, implied volatility closed moderately lower, dropping by 0.99 to end the session at a one month low of 27.93. The 30-day historical volatility ended the day off 0.10% to a one month low of 22.46%. The WVL Skew finished the day moderately lower, off by 0.57 to end at a one week low of 5.33.
Fundamental Notes
Weekly Export Sales Estimates
- 250,000-550,000 Metric tons. The previous report showed net sales at 411,400 MT for 2024/2025 were down 23 percent from the previous week and 14 percent from the prior 4-week average.
WASDE Estimates
- US Ending Stocks: 813 Million Bushels
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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