CNS Canada — ICE Futures Canada canola contracts settled at their weakest levels in nearly three months on Thursday, with more room to the downside as the technical bias has shifted lower.
After hitting contract highs within the past two weeks, the canola market has found itself in a steady downtrend. The nearby July contract settled right near its 200-day moving average of $520 per tonne on Thursday, while new-crop November could still drop another $10 to hit its own 200-day moving average, around $504 per tonne.
The relative strength indexes (RSI) for both the old- and new-crop contracts are still not in oversold territory, which should keep speculators on the sell side.
Looking at a weekly chart, canola is still relatively close to the upper edge of a long-term range going back for three years, with resistance at $540 and support at around $450 per tonne.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.