Wheat Futures Market Recap and Analysis

Wheat futures experienced an uptick on Tuesday, with the December contract closing at 570’4, an increase of 11’6 or 2.10%. Trading volume across all maturities reached 125,918 contracts, with the December maturity accounting for 67,415 of those. Open interest overall fell by 585 (0.14%) to 415,985 contracts outstanding, with the December maturity specifically decreasing by 2.53% to 198,434 contracts.
Technical analysis indicates that wheat futures have maintained support levels within the ‘MUST HOLD’ range of 557 1/2-560 1/2 this week. For the market to show signs of a more significant rally, bulls aim to push prices above the resistance pivot range of 582 3/4-585 1/2.

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Key technical levels are as follows: Resistance levels are at 596-600, 615-617 1/2, and 629 1/2-634. The pivot level is 582 3/4-585 1/2, while support levels are at 557 1/2-560 1/2 and 544 1/4.

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Fundamentally, weekly export sales estimates range from 350,000 to 650,000 MT, with an average estimate of 488,000 MT, compared to last week’s 533,000 MT. SovEcon forecasts a decrease in Russian wheat exports to 45.9m tons from 47.6m tons, citing a reduced crop forecast and increased intervention by the Ministry of Agriculture.

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Regarding options, the highest volumes were for the December 600 call (858) and the December 570 put (2,151). The options with the greatest open interest are the December 600 call with 8,238 contracts, and the December 550 put with 7,693 contracts.

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Volatility saw a slight increase, with Implied Volatility ending the session up by 0.14 to 29.82. The 30-day historical volatility decreased by 0.53% to 24.46%, while the WVL Skew dropped by 0.37 to end at 5.72.

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Historical price averages for March wheat futures over various time frames are also provided, though past performance is not indicative of future results. It’s important to note that futures trading carries substantial risk and may not be suitable for all investors. Trading advice is based on information from reliable sources and is subject to change without notice. Blue Line Futures, a member of NFA, does not guarantee the accuracy or completeness of the information provided and advises caution when considering such trades.

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It is important to note that no representation is being made that any account will or is likely to achieve profits or losses similar to those shown in hypothetical scenarios. In reality, there are often significant differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

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One of the primary limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. This means that they are created after the fact, which can lead to an inaccurate representation of what might happen in real trading situations.

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Moreover, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For instance, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are crucial factors that can adversely affect actual trading results.

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There are also numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results. All of these factors can adversely affect actual trading results.

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