Wheat options by Thomas Barry (TQB): Indecisive Friday.
Wheat spent the last day of the week residing in a rather interesting spot ($6.80-$6.85 1/2); one that seemed to attract a fair amount of cross-currents from those traders and customers that see buying and/or selling ops. , which made for rare two-sided trade and the biggest pit volume of the week. Buying and selling from different sources in the Dec. 700 calls and the same action in the 680 and 700 straddles. Lots of quoting was noted once the futures began to reflect new flirtation with the upside and the thought of a very complacent and quite large fund short finally being tickled into action. But the day was more or less another exercise in tedium, as no real panic ever ensured. But there’s no denying the fact that we’ve succeeded in lifting the wheat out of what had been a very stubborn rut, with the market up over 35 cents on the week and implied volatility that languished near 21% for what seemed like an eternity all the way up past the 25% level. That’s why we saw so much quoting going on all day Friday. Someone’s going to be positioned for a nice move and someone else isn’t. The question remains pretty much up the in the air heading home, but one thing is different…..after spending a good five weeks not able to jar loose so much as a sniff from the bigger players here in the wheat options market, it’s fair to say that we at least have almost everyone’s attention going into Monday’s report. Judging by Friday’s activity, the real trade seems to occur while the movement is afoot, with most of the posturing (quoting) filling in the copious part of the day when we are simply staring ayt the board, waiting for it to either take out another resistance point or fail back not the established range. We need one more really encouraging bit of news (C’mon China!) to spark that extra upside momentum. Otherwise we might keep noodling until we bore everyone out again.
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Remember – Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.