It seems ironic that today's markets saw a discussion of copper prices hitting a two year-high, while oat prices are also moving higher, both markets that are given credit by some as having forecasting powers for the broader market.
The December oat contract reached a contract high of $3/bushel on Oct. 21, while extended this move by 4 cents on Oct. 21 to close at $3.04/bu. Like the other grains, noncommercial traders are positioned on the long side, with this net-long position growing over each of the past four weeks to 2,178 contracts, the largest net-long reported in 10 weeks. This compares to 2,493 contracts net-long this time last year, while the five-year average for this week is 972 contracts net-long.
The lower study shows the Dec/March spread moving to a 1-cent inverse (December contract trading over the March). This is not unusual, this spread is seen inverted on this date in two of the past three years, averaging a 3-cent inverse over this period. This could, perhaps, be viewed as unusual so soon after harvest when stocks are currently forecast to grow larger in 2020-21 in both Canada and the United States according to the most recent government forecasts.
The continuous active chart shows this week's move breaching the 50% retracement of the move from the June 2020 high to the August low, calculated at $3.01/bu. This opens the door to a continued move to $3.12 1/2/bu, or the 61.8% retracement of the same downtrend.
DTN 360 Poll
This week's poll asks which crop you think has the most bullish potential in the 2020-21 crop year? You can weigh in with your ideas on this poll located on the lower-right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at firstname.lastname@example.org
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