MarketsFarm — ICE Futures canola contracts saw some choppy activity during the week ended Wednesday, but the general trend remains pointed lower.
“Whenever canola rebounds, it doesn’t go as high,” analyst Errol Anderson of Pro Market Communications in Calgary said.
Anderson described the chart pattern as a “falling top,” with previous attempts at recovery in the November contract topping out at $900, then $880 and $850, with the latest bounce running into resistance at $820.
November canola settled Wednesday at just below $800 per tonne, and Anderson saw support to the downside at $750 and then $735.
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“It’s not to say that there won’t be sudden rallies, but when a grower sees a rally it will be a (selling) opportunity,” said Anderson.
In addition to seasonal harvest pressure in Western Canada and expectations for increased soybean exports out of Brazil, Anderson was watching the global financial markets closely — especially given the meltdown in many equity markets on Tuesday.
He expected credit would become a larger issue over the winter, with the looming implosion of the debt crisis likely leading to defaults in the financial world that will affect global trade.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
