Chart: Falling Canola Futures Snowballing Lower 



  

Canola futures have fallen hard the past week, with little indication of how much more room to the downside there could be. 

  

“Once the snowball starts rolling, it just rolls,” said analyst Mike Jubinville of MarketsFarm.  


There have been no dynamic changes to the generally supportive canola fundamentals, but broad concerns over a looming global recession have speculators bailing out of vegetable oil markets in general, Jubinville said. The most-active November canola contract has lost over C$100/tonne over the past week alone, settling at C$912.10 on Wednesday, the lowest since March (see chart below). 

  

While there’s a technical argument to be made that canola has quickly become oversold, “as long as the spec guys are panicked and liquidating longs, who knows how far we’ll go?” Jubinville said. 


He said he expects to eventually see some stabilization in the canola market but added that a return to the highs is also unlikely without a return of the drought conditions seen in 2021. While there is still a long growing season ahead, Jubinville noted that canola also typically comes under pressure at this time of year, as seeding has wrapped up and weather concerns have not yet developed. 

  

The losses over the past week likely triggered some farmer selling, with scale-down commercial buying also picking up, according to Jubinville. 


November canola: source – Barchart 

November canola


Source: DePutter Publishing Ltd.

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