Grain markets get hit hard in Wednesday’s trade which has led to additional weakness Thursday morning. Where’s the technical support at?
Wheat
Wednesday’s Recap
March Wheat futures ended the session at a contract low of 541’2 Wednesday, losing 3’6. Across all maturities, volume was 95,662, with the March contract seeing 63,252 change hands. Overall open interest increased by 955 (0.21%), with March up by 344, or 0.13%, to 259,349.
Technicals
March wheat futures rallied out of the gates early yesterday but that quickly ran out of gas as the market reversed and finished near the lows of the session. That bearish reversal has led to additional weakness overnight with new contract lows being posted. The RSI is now in oversold territory with a reading of 27.9. We’ve seen in at and a little lower than these levels back in November. When the market did come up for air it was about a 30-cent relief rally, before resuming the downtrend.
Technical Levels of Importance
Resistance: 560 1/2**, 574 1/2-577 1/2***
Pivot: 549-552 1/2
Support: 540-542***, 520 3/4***
Fundamental Headlines
- European Union production of soft wheat could rise 11% in 2025/26 in a rebound from a 12-year low this season when the harvest was slashed by repeated heavy rain, consultancy Strategie Grains said. In its first production forecasts for next season, the firm projected output of soft wheat, the EU’s main cereal crop, at 126.6 million metric tons, up from 114.2 million in 2024/25.-Reuters
- Weekly Export Sales Estimates: 275,000-600,000. Last week’s report came in at 290,200 metric tons
Popular Options
Option volumes were greatest for the March 600 call (1,136) and the Jan 540 put (1,789). Calls with the greatest open interest are the March 700 strike (15,043), and for the puts are the Jan 540 strike (4,873).
Volatility Update
Implied Volatility closed the day moderately up with WVL higher by 0.9, to end at a one week high of 25.47. Historical volatility (30-day) settled at nan%, unchanged on the session nan%. The WVL Skew was moderately up with the 30-day higher by 0.48, closing the session at a one week high of 6.02.
Seasonal Tendencies Update
(Updated on 12.16.24)
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
(Updated on 12.16.24)
Friday’s Commitment of Traders report showed Fund positioning little changed from the previous week, coming in at a net short 66,779 contracts.
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