Canada Markets

November canola closed higher for the seventh time in nine sessions on June 13, reaching its highest trade in more than three weeks. The November settled $10.80/metric ton higher at $676.50/mt. Today's move is seen pushing further above the contract's 20-day moving average, which was breached on June 9, while nearing a test of the contract's 50-day moving average at $685.10/mt; we haven't seen a close above the 50-day since Nov. 16.

Further chart resistance lies at $716.40/mt, the 38.2% retracement of the move from the November high to the May 31 low. Resistance is also seen at $722.80/mt, after reaching this level in April and the $722.70/mt level in May.

While not shown, the daily volume in the November contract is reported at 17,648 contracts on June 13. While this remains elevated, daily volume has fallen for four consecutive sessions as traders show caution after reaching the highest daily volume seen during the life of the contract on June 7.

Noncommercial traders have added to their bearish net-short position for a third consecutive week in data reported for June 6, now holding the largest net-short position seen in 11 weeks at 72,622 contracts. This could be viewed as a bullish situation should a bullish catalyst appear.

Also supporting canola is the fact that the gains seen for the November contract have not kept pace with rapeseed and soybean oil. October soybean oil has gained 20.6% since its May 31 reversal, while August rapeseed has increased by 18.7%. The November canola contract is up 10.7% from its May 31 low.

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

Follow him on Twitter @Cliff Jamieson

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