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Grain Option Expiration

Published on: 12:41PM Dec 22, 2017

 

CORN (March)

 

Yesterdays Close:  March corn futures finished yesterday up 2 cents, trading in a range of 3 ¼ cents on the day.  Funds were estimated buyers of 5,000 contracts. 

Fundamentals:  Export sales yesterday came in at 1,558,300 metric tons, this was above even the high end of the expected range from 800,000-1,100,000 metric tons.  Not only was it above expectations, but it was 80% above last weeks export sales.  As we discussed in our interview with RFD-TV yesterday, this is a nice silver lining, but we really need to see better than expected weekly export sales on a consistent basis, not just once a month.  With Christmas right around the corner, it is likely that we see a thin volume in tomorrow’s trade.  January options expire at the close tomorrow, there are no significant strikes with a massive amount of open interest, but 350 looks to be the magnet as it has been without the addition of option expiration.  Next week the market will turn its focus back on South America weather and crop development.  We will also start hearing more about the January USDA report in the coming weeks as well. 

 

Technicals:  The bears are still in control though we have been trading mostly sideways over the past two weeks.  We continue to believe that there will be an opportunity to trade a nickel on either side of 350 until...Please sign up for a Free Trial to see our entire technical outlook and proprietary bias and levels.

 

SOYBEANS (January)


Yesterdays Close:  January soybeans finished the day 5 ¾ cents lower yesterday, trading in a range of 9 ¼ cents on the day.  Funds were estimated sellers of 8,000 contracts.

 

Fundamentals:  Export sales came in strong at 1,742,900 metric tons, this was towards the top end of the expected range from 1,300,000-1,800,000 metric tons; this was 20% more than last week’s read.  Unfortunately, it was not strong enough to offer support through the session.  As mentioned earlier in the week, we really need to see consistent beats; within expectations is just not getting the job done.  Weather in South America has been looking better than some had expected which could put them in a position to produce another record crop.  Volume may thin out tomorrow with Christmas right around the corner.  January options expire tomorrow, there are not any significant strikes with a massive amount of open interest but 950 is certainly one to be noted.  A lot of times the strikes with the most open interest tend to act as a magnet as market makers want to see the most options expire worthless as possible. 

 

Technicals:  Soybeans have closed lower 10 out of the last 12 sessions, taking as much as 66 ¾ cents off of prices.  This waterfall lower has brought the....Please sign up for a Free Trial to see our entire technical outlook and proprietary bias and levels.

 

WHEAT (March)

 

Yesterdays Close:  March wheat futures closed up 3 cents on the day, trading in a 5-cent range for the session.  Funds were estimated to have been buyers of 3,009 contracts.  

 

Fundamentals:  Export sales yesterday came in at 796,300 metric tons, this was above the expected range from 300,000-600,000 metric tons and 35% above last week’s number.  As mentioned earlier in the week and in previous weeks reports, we really need to see numbers like this on a more consistent basis to get the market going north, or at least offer support to it.  Low prices often cure low prices but If we start to see a decent rally, you’ve got to believe that these export numbers will stay subpar as buying US wheat will not be as appealing.  For this reason, we feel that there will be a lid on this market until we can find a shift on the fundamental front. 

 

Technicals: Wheat has managed to work itself nearly 20 cents off of the recent lows.  For the perma-bulls, this...Please sign up for a Free Trial to see our entire technical outlook and proprietary bias and levels.

 

 

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.