ICE canola corrects higher after breaking below support

By Phil Franz-Warkentin, Commodity News Service Canada

WINNIPEG, August 19 – ICE Canada canola contracts were holding posting small gains Wednesday morning in thin trade, as the market saw some consolidation following Tuesday’s sharp losses.
Canola broke below some major support levels during Tuesday’s session, which was bearish from a chart standpoint and could set the stage for further declines, according to analysts. However, there were also ideas that the downturn was overdone, accounting for some of Wednesday’s buying interest.
Ongoing uncertainty over the size of this year’s Canadian crop remained supportive as well. Statistics Canada releases its first survey-based production estimates of the year on Friday, August 21, and the crop is generally expected to be down on the year due to adverse weather during the growing season.

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However, harvest operations are starting up and farmer hedges were expected to weigh on values in the upcoming weeks. A softer tone in CBOT soyoil and other outside markets also put some pressure on values.
About 3,100 canola contracts had traded as of 8:46 CDT.
Milling wheat, durum, and barley futures were all untraded.
Prices in Canadian dollars per metric ton at 8:46 CDT: