CNS Canada –– A record-large U.S. soybean crop remains a bearish anchor on Canadian canola futures — but recent activity has shifted some technical indicators higher.
The November canola contract on ICE Futures Canada has held consistently below the 30-day moving average since May, but finally settled above that line on Monday. The 30-day moving average is compiled by calculating the mean closing price of the previous 30 sessions.
The November contract corrected back down to the moving average (now at roughly $410 per tonne) on Tuesday, but bounced off what is now support to finish above the moving average for the second straight session. The November contract settled Tuesday at $412.90 per tonne.
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Speculative funds are said to be holding very large short positions of over 40,000 contracts, according to some market participants — and the move above back above a level that had provided consistent resistance for months could trigger a larger short-covering bounce.
The 50-day moving average comes in at $420 per tonne, which could provide the next upside target.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
