Glacier FarmMedia – The path canola as well as other commodities will very likely be determined by the latest earnings report from technology giant, Nvidia, according to analyst Errol Anderson of Errol’s Commodity Wire in Calgary, Alta.
“Nvidia is bigger than all of Canada’s economy. It’s bigger than the Chinese stock market by itself,” stated Anderson. “That report, even though it’s not related to canola will have an impact. It’s the most powerful stock in the world.”
Based in Santa Clara, Cal., Nvidia controls about 80 per cent of the world market’s share of high-end graphics processing units and is well involved in developing artificial intelligence.
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Should Nvidia’s report be favourable to the world markets, including canola, he pegged resistance for the May contract at C$620 per tonne on the Intercontinental Exchange. If momentum builds for the Canadian oilseed, Anderson put the next level of resistance at C$650/tonne, followed by C$680.
If Nvidia’s report is negative, Anderson said “the equity world stumbles, and it will feed itself” with crude oil, corn and other commodities falling back.
“Canola will get caught in the crossfire. It can go up to $620 or it can go down to $550,” he said.
Anderson added that canola, along with corn and soybeans on the Chicago Board of Trade, are oversold and looking for an increase.
“We won’t see $700 in the near future, but I hope we won’t see $550,” he commented.
Nvidia was scheduled to release its report after the North American markets closed on Feb. 21. The effects were to be felt the following day.
— Glen Hallick reports for MarketsFarm from Winnipeg.
