CNS Canada — ICE canola futures have posted large losses over the past week, but chart signals are still overwhelmingly bearish, with at least another $10 to go before the November contract should find support.
November canola settled at $454.50 per tonne on Friday, down by over $20 from the previous week.
However, trend lines point toward the $440 per tonne area, seen as a level which should provide some support, according to analysts.
The contract is now well below all of its major short- and long-term moving averages, after dropping below the 200-day average during the week.
That point, around $460 per tonne, should now provide resistance on any attempts at bouncing higher.
The relative strength index, seen as an indication of whether or not a contract is oversold or overbought, dipped into oversold territory during the week, which could provide some support if short-covering materializes.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.