Corn, soybeans, and wheat have been choppy in overnight and into the morning. these are the levels to watch for in today’s trade.
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Corn
Wednesday’s Recap
March Corn futures settled at a one week low of 437’4 Wednesday, losing 2’6. Total volume was a heavy 522,906, with the March maturity seeing 172,933 change hands. Combined open interest increased 1,793 (0.11%) to end the session with 1,675,978 outstanding. The March maturity added 5.94%, or 1,793, to finish at 579,326.
Technicals
December corn futures were under minor pressure again in yesterday’s trade, but like prior days, it wasn’t all that bad considering the beatdown in soybeans and wheat. The market continuous to loiter near our pivot pocket from 425-426 1/2. A break and close below this pocket could start to mute some of the optimism but not necessarily turn the tide. That would come on a break back below 413 1/2-414 1/4. On the resistance side of things, 432 1/2-434 1/4 is the pocket the Bulls need to get out above to spur another leg higher. With the shot clock winding down on December futures (two weeks until first notice day), volume is starting to shift out to the March contract.
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
Wednesday Flash Sales:
- 401,357 metric tons of corn for delivery to Mexico during the 2024/2025 marketing year
- 290,820 metric tons of corn received in the reporting period for delivery to unknown destinations during the 2024/2025 marketing year
- Rosario sees a slightly smaller corn area for Argentina. They see harvest production between 50-51mmt vs 51-52mmt last month. Corn planting in Argentina is 36% complete.
Below is a look at corn export activity to Mexico this year, depicted by the orange line. As you can see this is well above historical norms.
Popular Options
The Nov ZC3 425 put saw the most action with 7,455 contracts changing hands. Calls with the most open interest are the July 450 strike (41,374), and for the puts are the Dec 400 strike (34,675).
Volatility Update
As measured by CVL, implied volatility was sharply lower, dropping by 0.75 to end at a twelve year low of 15.72. The 30-day historical volatility ended the session dropping 0.22% to a one month low of 15.21%. The CVL Skew was moderately lower with the 30-day off 0.085, closing at 1.33.
Below is a 5-year look at the CME CVOL chart, depicting 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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