Canada Markets

Since reaching a recent low of EUR 406.75/metric ton (mt) on Feb. 26, the new-crop August contract has rallied through its 20-day, 50-day, 100-day and today, its 200-day moving average. Late-session selling on Tuesday saw the August contract end just EUR 0.12/mt under the contract's 200-day moving average, for a gain of EUR 2.75/mt to EUR 446.75/mt. The overall rally since Feb. 26 has seen a boost of EUR 40/mt or 9.8%.

The move also brings the new crop future close to a test of the 38.2% retracement of the move from the contract's July 2023 high to the Feb. 26 low, as indicated by the horizontal red line at EUR 449.34/mt. A breach of this resistance, as well as psychological resistance at EUR 450/mt, could result in a continued move to the 50% retracement at EUR 462.50/mt.

The brown line on the first study shows the August/November futures spread, unchanged today at minus EUR 3.75/mt, the strongest close since Jan. 30. This compares to minus EUR 5/mt one year ago, and the five-year average of EUR 2.20/mt for this date.

For two consecutive days, canola contracts have shown signs of strength along with rapeseed, while diverging from weakness seen in soybeans and soybean oil. It is interesting to note that November canola is up 10% from its Feb. 7 low, similar to the percentage gain realized in rapeseed.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com.

Follow him on X, formerly known as Twitter, @CliffJamieson.

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