Market Movements Overview
Right before the markets closed on Wednesday, several markets reached new highs, while others dipped. Gold and silver experienced a surge in buying interest, likely due to ongoing central bank actions globally.
Corn stood out in the grain sector, benefiting from what seemed like commercial buying interest all day. As we noted yesterday, the closing price often holds the most significance. When looking at the day’s dynamics, the market appeared to gain momentum heading into the close. Particularly in metals, both gold and silver showed solid performance throughout the day, with a boost as the day ended. At that moment, gold for December (GCZ25) rose by $87, or 2.1%, but silver for the same month (SIZ25) outperformed, climbing $2.63, or 5.2%. This suggests that central banks are seizing the opportunity from recent downturns to start accumulating again, even as global political and economic uncertainties rise. Meanwhile, in energy markets, crude oil (CLZ25) dropped by $2.53, or 4.2%, hitting lows later in the afternoon due to strong commercial selling. This drop was evident when examining market conditions shifting from spot month trading in December to February 2027 contracts.
Corn was among the markets that saw new highs just ahead of closing. The December corn contract (ZCZ25) has gained attention lately. As I pointed out in Tuesday’s discussion, technical analysis often feels more mythical than practical. The price during the December contract fluctuated; starting low on a Sunday night, it gradually ascended to a new key low of $4.2675, just before peaking at $4.36 on Wednesday. The contract is close to its record high of $4.37 set on October 30. Funds seem to be adjusting their positions to lend support, and there’s noticeable commercial buying, particularly as December prices incrementally increased in March, May, and July. The December 26 contract is holding steady at $4.70, its highest closing since June 18. As always, attention should shift to the National Corn Index and national average basis figures later today.
The soybean market started in the red early on Wednesday but began to gain positive momentum toward closing, attributed perhaps to buying spillover from corn. Trading volume was relatively low for January (ZSF26), totaling 113,000 contracts, while January issues fell 2.75 cents on Tuesday. Typically, a volume decline during a price increase is seen as less supportive than a price upswing on higher volume. Interestingly, the CME recorded a drop in open interest by 3,100 contracts for January. Were the sellers returning as buyers, or was this surge due to new commercial interests? By the end, January closed down by 6.5 cents, March rose by 0.5 cents, and both May and July saw slight increases. The consistency in spread activity suggests late commercial interest buying, possibly from a buyer related to Bangladesh—a country often likened to the next China. Moving forward, the national soybean index will become increasingly relevant.
Then we have the wheat market. To my surprise, all three wheat markets didn’t diverge from corn and soybeans as expected—they all ended in the positive. The SRW December contract (ZWZ25) remained unchanged, although trading volume reached 86,000 contracts, just shy of its high. It’s uncertain whether this reflects indecision among traders or simply a lack of interest, but we’ll have to see how things unfold. The fundamentals for SRW are still viewed as bearish, yet that doesn’t preclude a market recovery. For HRW, the December contract (KEZ25) gained 1.75 cents, although March and May dropped slightly. My initial guess is that commercial traders were selling towards the end, but we’ll have clearer insights with tonight’s US HRW Index release. The July contract closed up by 3.0 cents, seemingly without particular cause.
