CNS Canada — ICE Futures Canada canola futures tried and failed to break higher on numerous occasions over the past two weeks, but could be poised to finally see a bounce, according to a market analyst.
A rebound in palm oil is supporting soyoil, which in turn is supportive for canola, said Errol Anderson of ProMarket Communications in Alberta.
Charts were pointing higher in soyoil, he said, with recent advances in crude oil also supportive for the vegetable oil markets in general.
Attention in the short term will be on the U.S. Department of Agriculture’s supply/demand report due out Friday.
“If the USDA turns out to be supportive, canola could go for a little pop,” Anderson added.
However, “there are bulls and bears pushing,” with a recent strengthening bias in the Canadian dollar a potential anchor on canola. Recent economic uncertainty in China is another factor to watch.
Overall, Anderson said a measuring of the bearish and bullish factors in canola was leaning toward the bullish side for the time being.
November canola is facing stiff chart resistance at $480 per tonne. If that level is taken out, Anderson said it could go as high as $492.
While such a bounce is possible, he also cautioned that any gains could be short-lived before the market retreats back to current levels or lower.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.