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Starbuck Manitoba Canada | I pointed out a head and shoulders formation on the canola weekly a few months back. If you look at the weekly canola chart (barchart Canola) go to a lower density and you will see that we gaped though the neckline. We broke the neckline first then rallied above it and have now come down and gaped lower. Not sure what to make of it since we have rallied back up through the neck line first.
My thoughts are that canola rallied this summer based more on fundamentals and did not follow the beans rally which was obviously a lot more speculative. Canola has also not dropped as hard as beans adding to my belief.
I pointed out the key reversal in beans on the monthly(Sept.) and now the follow through. I also stated that we have not seen the highs and that in the spring/summer of 13 we will see the final push. Now I am not so sure that it will happen that soon as a reversal on the weekly and monthly are very powerful. Its going to take something like an early frost in South America or continued dryness in North America,
Hauled out the last of my canola yesterday before the blizzard which is just starting. My average price for this year is $640/tonne less $15 basis. I also sold the last of my oats on the recent spike, and averaged $4.00 net. I So far have priced my crops almost perfect which scares me as I do not think I have been so spot on in my life( usually am to caught up in the hype and do not make enough sound marketing decisions). I am thinking if SA keeps humming along coupled with the fact that the world economy is in tough shape we could see canola bottom at $500 - $520. At that point I would buy back my canola. Beans could test the monthly trend line which I hate to say is $12.50 - $13.00 ouch! Still holding wheat, which will be the leader IMHO.
I hope I am not coming across as someone with my head up my a**. Some time a person gets on a roll and calls this market very close and people that pay attention can benefit. Is that not why you are reading this right now?
How is it that one day after the US election all the buzz is about how the US is about to fall off a fiscal cliff in 7 weeks? How was this news buried Romney should have made this front and centre.
Oh well Got my sled idling in the shed. They are calling for over a foot, going to be a fun winter!!! YEAH BABY.....
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Maydel.. Gap lower on canola weekly
