Canada Markets

Monday's weak session across both the grain and oilseed markets saw the new-crop November canola future fall $6.30/mt, ending the session at $487.80/mt, after reaching a low of 10 cents above last week's low of $483.50/mt. Price on the daily chart fell below the support of the upward-sloping trendline at $490.50/mt, which has largely supported trade since reaching the February low of $431.50/mt.

A further sign of bearishness is seen in the middle study, where a divergence in stochastic indicators in April is indicated by lower highs of the faster %k line in April, the blue line on the attached chart, while price remained above the support of its uptrend line. On April 9, the %k line reached 83.43%, while on April 16, the high was reached at 78.36%. This waning momentum is also seen on the price chart with the daily high of $500.70/mt reached on April 9, followed by a daily high of $500.20 on April 16 and a final push to $500.10 on April 17, before ending the session $3/mt lower at $494.10/mt.

Despite the weakness shown in the short-term actions of the November contract, commercial traders are indicating a cautious optimism as seen in the lower study. The Nov/Jan futures spread has narrowed from a low of minus $7.70/mt (January above the November) in early March to Monday's close of minus $6.60/mt, a sign of a cautious, gradual waning of bearish sentiment.

Markets will be watching Thursday's release of March planting intentions by Statistics Canada. Pre-report trade estimates are suggesting that 20 million to 22 million acres of canola will be seeded, as compared to the 19.936 million acres seeded in 2013.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(AG)

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