Glacier FarmMedia — ICE Futures canola fell from contract highs as summer officially began and wild swings in outside markets weighed on values. However, support held to the downside and the uptrend remained intact ahead of a pair of key reports that could provide some nearby direction.
The November canola contract hit a high of C$751.70 per tonne on June 20 but lost roughly C$50/tonne in the next two trading sessions. It settled just above its 20-day moving average on June 25 at 714.60/tonne.
The fact that the contract managed to hold the line at that technical level while trend lines were still pointing higher was supportive from chart standpoint, said MarketsFarm analyst Mike Jubinville. However, he also cautioned that the 50-per-cent retracement level around C$670/tonne was a possible downside target.
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In the absence of any substantial outside news, like United States bombing of Iran that roiled energy markets over the weekend, canola may trade in a sideways range for the time being. However, market participants will be watching updated acreage estimates from Statistics Canada and the U.S. Department of Agriculture, said MarketsFarm analyst Bruce Burnett.
The Canadian numbers will be out on Friday, June 27, while the U.S. data follows on Monday, June 30. Average pre-report expectations are for an increase in canola plantings from the 21.6 million acres forecast in March, but Burnett said any movement in the soy complex after the USDA report will likely have a larger influence on the markets.
Weather conditions after the Canada Day and U.S. Independence Day holidays will also be an important market driver, added Jubinville.
