Oliver Sloup was on RFD-TV yesterday afternoon, sharing his thoughts on the potential contrarian setup on the corn and soybean markets.  

We’ve included 2 bonus charts today!

Soybeans

Thursday’s Recap
March Soybean futures settled at a one week high of 1003’2 Thursday, up 0’4. Across all maturities, a heavy 389,840 contracts changed hands, with 130,368 traded in the March maturity. Overall open interest decreased by 1,199, or 0.13%, with March higher by 20,145 (6.19%) to 345,392.

Technicals
The soybean market continues to look like a dead duck as it lingers in a relatively narrow sideways range. We’ve been halfway optimistic on beans since being able to defend the low end of the range dating back to august. Yesterday we laid out the contrarian case for potential outperformance VS corn, but the Bulls will need to see consecutive closes above resistance to confirm.

Technical Levels of Importance
Resistance: 1002 1/2-1006 1/2***, 1011 1/2-1013 3/4**, 1018-1024 3/4****
Pivot: 986 1/4-987 1/4
Support: 977 1/4-980 3/4*** 973 1/2**

Bonus Chart 1
Below is a look at the long 2 corn, short 1 bean chart referenced in Thursday’s RFD-TV interview as well as AgriTalk Radio. Is it time for some reversion to the mean?

*Past performance is not necessarily indicative of future results. This is not a direct recommendation

Popular Options

Option trading centered around the Jan 1000 calls with 6,425 traded and the Jan 990 puts with volume of 4,082. Option open interest is highest for the March 1100 calls at 18,120, and the March 980 puts at 28,629.

Volatility Update
Implied Volatility closed the session slightly down with SVL losing 0.14, to settle at 15.70. Lower by 0.0330% to a one month low, historical volatility (as measured by the 30-day) closed at 13.77%. The SVL Skew was slightly lower, dropping by 0.13 to end the day at -0.31, a one week low.

Seasonal Tendencies Update
(Updated on 12.9.24)

Below is a look at historical price averages for January soybean futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results). As with corn, December has been a historically friendlier month for soybeans. Keep in mind though that we’ve seen a lot of counter seasonal trends for beans throughout the year.

Commitment of Traders Update
(Updated on 12.9.24)

Friday’s Commitment of Traders report showed funds were net buyers of roughly 9.2k futures/options contracts, shrinking their net short position to -72,217 contracts.

Wheat

Thursday’s Recap
Wheat futures were lower Thursday with the March contract finishing the session at 558’4, down by 4’6. Overall, a light 80,178 contracts were traded, with 52,473 done in March. Total open interest increased by 4,447 (1.05%) to end the session with 427,368 outstanding. The March maturity increased 0.41%, or 4,447, to finish at 245,158.

Technicals
Wheat futures lost some ground yesterday, but it really wasn’t enough to do any serios damage to the chart. In the soybean section we laid out the potential for beans to outperform corn, we feel you could make the same case for wheat, just looking at the spread. Of course, there are other outside factors that could continue to keep corn outperform.

Technical Levels of Importance

• Resistance: 574 1/2-577 1/2***
• Pivot: 560 1/2
• Support: 546 1/4-549***, 540-542***, 520 3/4***

Bonus Chart 2
Below is a look at the front month corn/wheat spread. Corn has been outperforming, is it wheat’s time to show some strength? TBD.

*Past performance is not necessarily indicative of future results. This is not a direct recommendation

Popular Options

Option trading centered around the Feb 620 calls with 3,164 changing hands and the Jan 545 puts with volume of 1,784. Highest volumes in March option trading were seen in the 650 calls (1,547) and the 520 puts (1,130). Calls with the largest open interest are the March 700 strike (15,298), and for the puts are the Jan 540 strike (4,027).

Volatility Update
As measured by WVL, implied volatility ended the day moderately down, off 0.33 to close the session at a twelve year low of 24.07. Gaining 0.10%, historical volatility (as measured by the 30-day) settled at 21.37%. The WVL Skew finished the day lower, down 0.27 to close the session at 5.14, a one week low.

Seasonal Tendencies Update
(Updated on 12.9.24)

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 12.9.24)

Friday’s Commitment of Traders report showed Funds grew their net short position by about 10.3k futures contracts, expanding their net short to -69,386, the largest net short position since the Summer.

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