In each of the past two weeks, the range of trade in the November canola contract has held within the previous week's range (not shown) while Monday's trade has also fell within last week's range as this market seeks direction.
Both supply and demand remain questionable with ongoing uncertainty over trade with China, while the manner in which producers will react in terms of seeded acres and dry conditions in various areas of the Prairies remains an ongoing concern.
The histogram on the lower study on the attached chart shows investors paring their bearish net-short position in canola futures for the second straight week as of April 9, although this group continues to hold close to the largest bearish position seen in data going back to the beginning of the crop year
What is interesting is the second study with the green line representing the new-crop Nov/Jan spread that closed at minus $6.40/metric ton (January trading above the November). This still represents a neutral view of market fundamentals, roughly 53% of estimated commercial carry, as determined by the commercial trade in forward positions.
While the old-crop May contract ended lower for the first time in five sessions on Monday, the November contract ended unchanged after closing lower over each of the past five sessions. The sideways trend in the new-crop trade will be broken with a move above $489.20/mt or below $469.50/mt. Given a move lower, nearby potential support on the continuous November contract is found nearby at $463.70/mt
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