A Choppy Trade in Grains Offers Opportunities
Grain markets have been choppy over the last 24 hours, presenting some great opportunities for shorter term traders
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Corn
Wednesday’s Recap
May Corn futures settled at 512’2 Wednesday, down by 3’4, in mostly lower trade. Across all maturities, volume was 516,971, with the May contract seeing 185,421 traded. Total open interest ended at a contract high of 2,073,538, higher by 1,924, or 0.0929%. May open interest rose 35,114 (4.66%), to 787,880.
Technicals
Corn futures attempted to keep the rally going yesterday but failed to attract new buyers near Tuesday’s high which led to a slight reversal back near our pivot pocket from 499-502 1/4. Into March options expiration tomorrow, $5.00 looks like a potential magnet for the market. Below that and the 20-day moving average is in play which comes in near 491 1/4. As mentioned in yesterday’s commentary, the trend is still intact, but these are likely price levels where producers (who are perpetually long) may consider playing a little more defense. Options can be a great way to protect the downside while keeping the upside open.
Technical Levels of Importance
Resistance: 508 1/4**
Pivot: 499-502 1/4
Support: 488-491 1/4***, 479 3/4-482 1/4**
Popular Options
Option volumes were highest for the March 500 call (4,535) and the March 500 put (6,917). Calls with the most open interest are the July 500 strike (41,720), and for the puts are the March 440 strike (19,734).
Volatility Update
As measured by CVL, implied volatility closed the day down, dropping by 0.49 to end the session at 20.71. Gaining 0.22% to a one month high, historical volatility (as measured by the 30-day) closed the session at 21.73%. The CVL Skew closed the session sharply down, off by 0.83 to settle at 0.94, a one month low.
Seasonal Tendencies Update
(Updated on 2.18.25)
Below is a look at historical price averages for May 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
Friday’s Commitment of Traders report showed Funds were net sellers of about 29k futures contracts, nearly all of which was long liquidation. This trims their net long position to 332,389.Â
Soybeans
Wednesday’s Recap
May Soybean futures settled at 1048’2 Wednesday, off 7’2, in lower trade across the board. Across all maturities, 332,888 contracts were traded, with 117,494 done in the May maturity. Total open interest decreased by 12,145 (1.35%), with May gaining 8,824, or 2.57%, to 351,936.
Technicals
March soybeans tested but failed against the 20-day moving average in yesterdays trade, the second time this week. That has brought prices back near our pivot pocket from 1035-1039. A failure to hold ground above our pivot pocket could keep near term pressure on with more significant support below the market from 1018 1/2-1025. For beans, we tend to favor the November contract at the moment. The May/November spread is also noteworthy for this time of year, looking at just historical seasonality.
Technical Levels of Importance
Resistance: 1055-1062 1/2***, 1077 1/4-1080**
Pivot: 1035-1039
Support: 1018 1/2-1025****
Popular Options
Option volumes were greatest for the March 1040 call (2,703) and the March 1040 put (6,410). Option open interest is highest for the March 1100 calls at 19,016, and the March 1000 puts at 22,548.
Volatility Update
As measured by SVL, implied volatility finished the session moderately lower, dropping 0.62 to end the day at a one month low of 15.76. Historical volatility (30-day) closed at 22.51%, adding 0.14%. The SVL Skew was lower with the 30-day down by 0.23, finishing at a one week low of 1.15.
Seasonal Tendencies Update
(Updated on 2.18.25)
Below is a look at historical price averages for May soybean 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
Friday’s Commitment of Traders report showed Funds were net sellers of roughly 28k futures/options contracts, which was split fairly evenly between long liquidation and new short positions.
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