November canola closed $6.10/mt lower to start the week to end at $880.10/mt, its lowest close in 10 sessions. Trade continues to consolidate in a triangle consolidation pattern, which has been in place since the contract high was reached on July 13.
The noncommercial net-long position, as reported by the CFTC, is just one of the six factors included in DTN's daily commodity analysis, but provides an interesting perspective of the views of the speculative crowd. As of Aug. 31, the noncommercial or speculative net-long has grown larger for a fifth consecutive week to 21,765 contracts.
This is of interest for several reasons. First, this is the largest net-long position seen since 22,832 contracts were reported as of April 27, or more than four months. This is the fifth consecutive weekly increase in the size of this position, while a modest increase in the size of this position would lead to the largest speculative position seen since late February, or more than six months.
As well, this took place on a week when the speculative traders reduced their bullish net-long positions in soybeans, soybean oil and soymeal futures. The noncommercial net-long position in soybeans fell for a third consecutive week while to the lowest level seen since August 2020. The noncommercial net-long position in soybean oil fell lower for the first time in five weeks, while to the smallest bullish position seen since mid-August. The noncommercial net-long position for soymeal futures fell for a second week, while to the lowest level seen since August.
Lastly, the week-over-week change in the size of this position resulted in an increase of 6,384 contracts or 41.5%. This is the largest week-over-week change in the number of contracts seen since the week of Oct. 27 2020.
This group can change its stance quickly. The daily November chart shows price nearing key support levels which may play an important role in short term trade. The contract's 50-day moving average is $872.50/mt, just $4.60/mt below today's close, while the lower-boundary of a consolidation chart pattern is shown at $872.20/mt, again, just $4.90/mt below today's close. This bears watching in upcoming trade.
Cliff Jamieson can be reached at email@example.com
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