Canola charts pointed lower

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.

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Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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