Winnipeg, Jan. 10 (CNS Canada) – ICE Futures Canada canola futures are near an interesting point from a chart standpoint, with the most active March contract settling right at the $500 per tonne mark on Tuesday.
In addition to being a psychological benchmark, $500 is also within thirty cents of the 200-day moving average of $499.70.
While canola prices have declined since the beginning of December, the market in recent sessions has shown signs of stabilizing right in the middle of a wide $80 range
The high near $540 per tonne hit in late November mark the upper end of that wide range, while the summer low near $460 provide the floor.
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Analysts generally believe that a retest of either extreme is unlikely in the near term, with consolidation around current levels a greater possibility.
Nearby support comes in at around C$495, with resistance at C$502.
Over the past month fund traders have moved from a net long position in canola to a small, but growing, net short position. While they have room to add to that short position, oversold indicators on the charts could result in some short-covering as well.
