In the grain markets, we experienced another mixed morning. On Tuesday, wheat futures saw an uptick, with the December contract closing at 570’4, marking an increase of 11’6 or 2.10%. Trading volume across all maturities totaled 125,918 contracts, with the December maturity accounting for 67,415 of those. Open interest overall decreased by 585 (0.14%), settling at 415,985 outstanding contracts for the day. The December maturity specifically saw a drop of 2.53%, or 585 contracts, ending at 198,434.
Technical Analysis: Wheat futures have managed to maintain our ‘MUST HOLD’ support level, which remains between 557 1/2 and 560 1/2 this week. For the bulls to ignite a more significant rally, they need to push through and close above the pivot range of 582 3/4 to 585 1/2. Key resistance levels are identified at 596-600, 615-617 1/2, and 629 1/2 to 634. Support levels are crucial at 557 1/2 to 560 1/2 and 544 1/4.
Fundamental Insights: The weekly export sales estimates for wheat are within the range of 350,000 to 650,000 metric tons (MT).
Avg Est: 488,000. Last Week: 533,000 MT. Russian Exports. SovEcon sees wheat exports at 45.9m tons, down from 47.6m tons citing “a decrease in the crop forecast and increased intervention by the Ministry of Agriculture in market operations”. Popular Options. Option volumes were highest for the Dec 600 call (858) and the Dec 570 put (2,151). Options with the greatest open interest are the Dec 600 call with 8,238, and the Dec 550 put with 7,693. Volatility Update. Implied Volatility finished the session slightly up with WVL higher by 0.14, to end the day at 29.82. The 30-day historical volatility finished the day off by 0.53% to 24.46%. The WVL Skew finished the day lower, dropping by 0.37 to end at 5.72. Seasonal Tendencies Update. 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).
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Another mixed morning in grain markets has been observed.
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