CNS Canada –– ICE Futures Canada canola futures moved lower during the week ended Wednesday, but remain stuck in the same wide range they’ve been in for the past month.
The technical trend is starting to point lower, but the possibility of a seasonal bounce is also still there.
From a chart standpoint, both the May and the July contracts remain in ranges of roughly $450 to $470 per tonne.
After trending higher for three months and hitting session highs above $470 in late February and early March, the May canola contract has since tested the $450 level to the downside on a number of occasions. Each subsequent corrective bounce higher has seen a lower top, which could be seen as bearish from a technical standpoint, said analyst Mike Jubinville of ProFarmer Canada.
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However, from a fundamental standpoint “there is a seasonality to canola, that suggests a higher trend sometime between now and mid-June,” he added.
While conditions are relatively favourable across much of Western Canada ahead of spring seeding, there is still more than enough uncertainty for something to come forward and trigger a bounce, he said.
Activity in the U.S. soybean market or Canadian currency could also provide the catalyst for a move one way or the other in canola, added Keith Ferley of RBC Dominion Securities in Winnipeg.
Positioning ahead of Statistics Canada’s first official acreage estimates of the year, on April 23, could also provide some direction in the near term.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
