Canola futures have trended mostly higher for much of May but may be nearing the upper end of their nearby range.
Solid demand from both exporters and domestic crushers has kept canola well supported (see chart below), while a firmer tone in world energy and vegetable oil markets has also added some upside momentum, according to MarketsFarm Pro analyst Mike Jubinville. He added that while some overbought signals were starting to appear on the charts, "the trend is still there."
The July canola contract has moved above its 20- and 40-day moving averages and is now testing the 100-day and 200-day averages.
Looking at a weekly chart, Jubinville placed resistance in the July contract at around C$480/tonne, and noted that prices would have to move above that level to signal a sustained uptrend. A fresh bullish catalyst would be needed to break above that resistance, he said, with the market likely stalling out if that doesn't materialize.
Weather through the growing season could be one such catalyst, as spring seeding moves along and attention turns to North American growing conditions.
July canola: source - Barchart
Source: DePutter Publishing Ltd.
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