Grain markets were mostly lower in Tuesday’s trade which has led to additional weakness into the Wednesday morning trade. More weakness to come ahead of Friday’s options expiration?
Corn
Tuesday’s Recap
Corn futures were lower Tuesday with the March contract finishing the session at 437’6, dropping by 2’0. Overall the session saw 484,591 contracts traded, with March volume coming in at 165,885. Combined open interest dropped 4,235, or 0.25%, to 1,666,691. March increased by 18,238 (2.94%), finishing at 638,424.
Technicals
December corn futures traded up near resistance from 432 1/2-434 1/4 but ran out of gas. The market has pulled back to our pivot pocket from 425-426 1/2. A failure to defend this pocket leaves the door open for a further retracement to 420, which coincidentally is where the “max pain” would be into Friday’s December options expiration.
Technical Levels of Importance
Resistance: 432 1/2-434 1/4***, 446-447****
Pivot: 425-426 1/2
Support:419 3/4-420***, 409 1/4-410 1/2****
Popular Options
Option volumes were greatest for the Dec 430 call (6,176) and the Dec 420 put (8,699). Option open interest is largest for the July 450 calls at 42,074, and the Dec 400 puts at 33,395.
Volatility Update
Implied Volatility finished sharply higher with CVL adding 0.7, to end at a one week high of 17.18. Historical volatility (30-day) finished at 19.31%, higher by 0.0822%. The CVL Skew was moderately down with the 30-day off 0.43, closing at a one week low of 1.04.
Seasonal Tendencies Update
(Updated on 11.18.24)
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
(Updated on 11.18.24)
Friday’s Commitment of Traders report showed funds were net buyers of about 96.7k contracts, 3/4 of which was short covering. None the less, the recent buying spree expands the Managed Money net long position to 99,779, the largest net long position since February of 2023!
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