Grain Markets Battle Back From Overnight Weakness

It was an eventful morning, particularly in the cattle complex with a big gap higher, but the market settled down shortly after the open with some contracts closing lower on the day.  Grain markets were mostly mixed.

Wheat

Monday’s Recap
Monday’s Wheat market was lower with the March contract off by 9’0, or 1.59%, to 555’6, a one week low. Across all maturities, volume was 149,967, with the March contract seeing 82,115 done. Combined open interest fell by 8,768, or 2.06%, to 416,006. March rose by 7,970 (3.57%), finishing at 231,167.

Technicals
March Chicago wheat futures got hit hard in Monday’s trade but have found their footing overnight. So far yesterday’s low marks a higher low VS the low from two weeks ago. Though the Bulls might be pleased to see some green on the screen, they have their work cut out for them. Resistance is still aways away which comes in from 574 1/2-577 1/2. Consecutive closes above this pocket would mark a higher high and is ultimately needed to help carve out a meaningful low.

Technical Levels of Importance
Resistance: 574 1/2-577 1/2***
Pivot: 546 1/4-549
Support: 540-542, 520 3/4

Fundamental Notes
Weekly Export Inspections

• 360,513 metric tons. Within the range of expectations. Above last week’s 196,746.

Crop Progress Update

• 55% of the winter wheat crop was in good to excellent condition as of Sunday, up from 49% a week earlier and above the average estimate of 51% in a Reuters poll of 13 analysts. Estimates ranged from 50% to 53% good to excellent.

Popular Options

The Nov ZW5 545 put saw the most action with 707 contracts changing hands. For March options, the 580 calls had the highest volume with 1,113 traded, and the most active put was the 520 strike with 421 contracts done. Options with the highest open interest are the March 650 call with 7,460, and the March 560 put with 4,053.

Volatility Update
Implied Volatility finished the day lower with WVL dropping by 0.64, to end the session at a one week low of 27.48. The 30-day historical volatility closed adding 0.27% to 24.36%. The WVL Skew ended the session moderately down, losing 0.58 to settle at 6.24.

Seasonal Tendencies Update
(Updated on 11.25.24)

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 11.25.24)

Friday’s Commitment of Traders report showed Funds grew their net short position yet again, expanding it to -59,620, the largest net short position since the Summer. 

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