MarketsFarm — ICE Futures canola broke out of a long standing sideways trading range during the first week of October, but could be running out of steam to the upside from a technical standpoint.
The nearby November contract had held within a $15 range between $440 and $455 per tonne all summer, but jumped out of that range with six straight days of gains to settle Monday at $462.60.
The rally took the November contract above both the 20-day and 100-day moving averages, with the 200-day average a possible upside target around $468 per tonne.
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The pattern was similar in the January futures, which settled Monday at $471.20. The January contract sees nearby upside resistance in the $472-$475 area.
While persistent concerns over harvest delays in parts of Western Canada could keep fueling a rally, the market is starting to look overbought on the charts.
The relative strength index moved above 70 points in both the November and January contracts, a sign that a bullish uptrend is slowing down.
— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.
