The Good: Canola futures had a good day with nearby January futures up by C$2.50 per tonne to close at C$641.30 per tonne. The gains today pushed the canola contract above the 50 day moving average which stands at C$638.44 per tonne. This is a bullish signal which is confirming the move off of the contract lows that were set at the beginning of October. This does not mean that canola futures are headed significantly higher from these levels as the upside target is currently close to the C$650 per tonne. In order to rally significantly, Canadian exports need to pick up steam or a trade agreement is reached with China.
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The Good, Bad & Ugly
The Good:Â Canola futures were strong today with nearby November futures trading up by C$5.50 per tonne and settled at C$624.70…
The Bad:Â The nearby spring wheat contract closed down by one cent per bushel to settle at US$5.60 per bushel. The bad news is that the 50 day moving average has been tested during the past three sessions and failed on each occasion. This means that the recent rally is likely not to be sustained for any length of time. Spring wheat remains in a sideways trend and has no momentum to break out of the funk.
The Ugly: Over the past two weeks the spread between the Minneapolis and Kansas City wheat contracts dropped to a contact low of 37.75 U.S. cents The recent peak of the spread occurred on October 13 when the spread was 70.25 U.S. cents. The collapse in the Minneapolis – Kansas City spread has been ugly and is due mostly to a lagging spring wheat contract. Winter wheat contracts have been rallying on stronger global import demand. The ugly news is that spring wheat has not kept up with the gains in Kansas City. Until spring wheat futures can stage a significant rally, this spread will remain in the 35 to 40 cents per bushel trading range.
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