Grain Markets Test Technical Support. Will it Hold?

Grain Express

/ by BlueLineFutures | Leave a comment

Grain futures prices were weaker in Tuesday’s trade which has led to some additional weakness Wednesday morning. Prices are now back to important technical support levels, will it hold?

Corn

Tuesday’s Recap
March Corn futures settled at 440’2 Tuesday, dropping 2’4, in lower trade across the board. Combined volume was a heavy 553,929, with March seeing 170,400 done. Across all maturities, open interest increased by 12,022 (0.72%), with March up by 15,817, or 2.98%, to 546,842.

Technicals
December corn futures have been able to defend our pivot pocket over the last 3 1/2 sessions which keeps the ball in the Bulls court. A break and close below 425 takes us back to the recent breakout point near 420. Below that and the tide likely shifts in the near term to favor the Bears. On the resistance side of thing, our pocket from 432 1/2-434 1/4 remains intact. A move above here could spark additional technical momentum towards 446-447. Though corn was mute yesterday, you could make the case that it performed very well considering the pressure we saw in soybeans and wheat. If you’re looking for some wild card plays in this market, options may be the place to look with volatility at historically low levels.

Technical Levels of Importance
Resistance: 432 1/2-434 1/4***, 446-447****
Pivot: 425-426 1/2
Support: 419 3/4-420**, 413 1/2-414 1/4****, 397-401 1/4****


Fundamental Notes

  • Tuesday Morning Flash Sale: Private exporters reported sales of 110,500 metric tons (4,350,191 bushels) of corn for delivery to Mexico during the 2024/2025 marketing year.
  • Weekly Export Inspections: 793,012 MT. Down slightly from last week’s 797,639.
  • SovEcon raised their estimate for Ukraine’s 2024 corn crop by 1.6m tons to 25.1m tons. They raised corn exports by 1.3m tons to 20.3m tons.
  • EU Corn imports totaled 7.1m tons as of November 10th, up 8% year over year.


Popular Options
Option trading centered around the Dec 430 calls with 2,773 changing hands and the March 440 puts with volume of 3,257. Calls with the largest open interest are the July 450 strike (41,264), and for the puts are the Dec 400 strike (34,828).

Volatility Update
Implied Volatility finished the day moderately lower with CVL dropping 0.21, to close the session at a twelve year low of 16.46. Historical volatility (30-day) closed the day at 15.44%, down by 0.17%, to a one month low. The CVL Skew closed the session moderately down, lower by 0.28 to settle at 1.41. Below is a 5-year look at the CME CVOL chart, dipticting historically low levels of volatility.

Seasonal Tendencies Update
Below is a look at historical price averages for March corn 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 tough time for the market to stage a meaningful rally but can stage somewhat of a Santa Clause Rally through December. Whether or not that plays true this year is TBD.

Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of about 38.5k contracts, which puts them net long 3,035, the first net long position since August of 2023!

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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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