MarketsFarm — The ICE Futures canola market moved within a wide range during the week ended Wednesday, hitting some of its best levels in a month before running into resistance at the highs.
With traders in the United States moving to the sidelines for the U.S. Thanksgiving holiday, activity should be thin and choppy until next Monday.
Speculators moving money around accounted for much of the activity, with movement in the Chicago soybean market in reaction to Brazilian weather forecasts another feature.
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“It’s purely technical and we’re waiting to see how the (South American) weather develops,” said commodity futures specialist Jamie Wilton, of RJ O’Brien in Winnipeg.
While canola fell on Wednesday, the nearby trend is still pointing higher, according to MarketsFarm analyst Mike Jubinville.
With speculative fund traders holding a large net short position in canola, he expected the January contract would need to close above $735 per tonne to trigger a more sustained move higher, with $750 the next upside target.
The 200-day moving average around $741 per tonne was another chart point to watch, according to Wilton, with the nine-day exponential moving average around $709 a key support level.
“Monday will be key,” according to Jubinville, who expected U.S. traders returning from the Thanksgiving holiday would look at the South American situation and set the direction of the oilseed markets going into December.
“It will just be modest shifting of fund positions until we see a real signal from a chart perspective, and we have not seen that signal yet,” he said.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
