Bearish chart signals keep canola pointed lower

CNS Canada — Canola contracts on the ICE Futures Canada platform have lost roughly $30 per tonne over the past month and have more room to the downside from a chart standpoint.

The nearby January contract settled Monday at $491.20 per tonne, just above the September low of $489.50. A break below that point would set the stage for a test of the $475-$480 per tonne area.

The March contract fell below the psychological $500 per tonne mark Monday, with the next support coming in at about $485-$490 per tonne.

The Relative Strength Index (RSI) is in oversold territory, which could be a sign of an impending corrective bounce.

If canola does manage to recover off of its nearby lows, the first upside target in the January contract likely comes at $500 and then again at the 200-day moving average of $503 per tonne.

For the March contract, a return to the 200-day moving average would take the price back to $508 per tonne.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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