CNS Canada — After hitting a contract high Monday, the ICE Futures Canada July canola contract subsequently turned decidedly lower to form a key reversal pattern from a chart perspective.
July canola hit a high of $539.50 per tonne Monday, but settled right around where it started, near the lows of the day, at $536.70.
With prices seeing follow-through selling on Tuesday, the activity paints the picture of a classic ‘shooting star’ candlestick pattern, with a last-ditch frenzy of buying in an uptrend followed by a correction lower.
If speculators continue to exit long positions, possible nearby support levels include the 20-day moving average, around $529 per tonne, followed by the 100-day moving average, around $519.
However, the longer-term uptrend remains intact despite the latest correction, with the next resistance above the $539.50 high seen at around $543 per tonne.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow him at @philfw on Twitter.