Canola futures testing chart resistance

November canola briefly topped $480 Monday

MarketsFarm — Recent price activity in the ICE Futures canola market has been bullish from a technical standpoint, with the futures poised for a break higher if the rally can be sustained.

After trading at a low of $468.10 per tonne in late June, the November canola contract rallied to briefly trade above the psychological $480 per tonne level on Monday. The contract has not managed to settle above that mark since early April, despite a number of attempts.

“The funds are short and the technicals are firming here,” a Winnipeg-based trader said, noting fund short-covering has helped prices improve over the past week.

“If you get through ($480), there will be further fund buying and a chance to spike it higher,” the trader added.

The managed money net short position was sitting at about 39,000 contracts in canola as of June 30.

Above $480, the next upside target can be seen at the 200-day moving average of $481 per tonne. After that, the $490 and $500 per tonne levels mark the next major upside resistance.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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