Grain Markets Retreat Overnight
Corn futures hit an inflection point yesterday and have so far failed. Time to protect downside risk?
Corn
Thursday’s Recap
March Corn futures ended the day at a one month high of 459’4 Thursday, adding 1’0. Overall the session saw 308,598 contracts change hands, with March volume coming in at 163,449. Total open interest ended at a one month high of 1,668,384, higher by 17,583, or 1.07%. March open interest shed 2,065 (0.28%), to 744,166.
Technicals
Corn futures rested previously important price points near 460 which aligns with the lows from last February as well as the breakdown point in June. As mentioned in our interviews with RFD-TV and AgriTalk yesterday, we feel that this a good spot for producers to play defense on price. If the Bulls can chew through this pocket with some conviction, a run back to 470-471 1/2 would be the next meaningful upside target.
Technical Levels of Importance
Resistance: 459-460***, 470-471 1/2****
Pivot: 449 3/4 – 452 1/4
Support:437 1/2-440***, 425 1/2-428***
Weekly Export Sales Snapshot
Net sales of 777,000 MT for 2024/2025 were down 55 percent from the previous week and 44 percent from the prior 4-week average. Increases primarily for Mexico (292,500 MT, including 81,000 MT switched from unknown destinations and decreases 6,400 MT), Japan (179,100 MT, including 76,000 MT switched from unknown destinations and decreases of 3,600 MT), Colombia (160,000 MT, including 50,000 MT switched from unknown destinations and decreases of 500 MT), Costa Rica (97,400 MT, including 27,200 MT switched from unknown destinations and decreases of 700 MT), and South Korea (63,200 MT, including 60,000 MT switched from unknown destinations), were offset by reductions for unknown destinations (99,900 MT), Panama (18,500 MT), the Leeward Windward Islands (2,700 MT), and Honduras (800 MT). Exports of 1,002,500 MT were down 11 percent from the previous week and 9 percent from the prior 4-week average. The destinations were primarily to Mexico (353,900 MT), Colombia (197,100 MT), Japan (191,300 MT), South Korea (63,200 MT), and Honduras (48,500 MT).
Popular Options
Option trading centered around the Jan ZC1 460 calls with 2,458 changing hands and the Feb 420 puts with volume of 2,404. For March options, the 440 calls were the most actively traded with 2,112 done, and the highest volume put was the 460 strike with 2,243 contracts changing hands. Calls with the most open interest are the July 500 strike (43,249), and for the puts are the March 430 strike (25,789).
Volatility Update
Implied Volatility finished the day slightly down with CVL losing 0.12, to close at a one week low of 18.26. Unchanged on the session nan%, historical volatility (as measured by the 30-day) ended the day at nan%. The CVL Skew ended the day moderately lower, down by 0.083 to close the session at 0.88.
Seasonal Tendencies Update
(Updated on 12.30.24)
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).
Commitment of Traders Update
(Updated on 12.31.24)
Managed Money increased their net long position by 1,532 contracts from December 17th to December 24th, expanding their net long position to 160,947 contracts.
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