DTN Canola Six Factors

TREND: The trend for March canola is revised to lower for now.

NONCOMMERCIAL OUTLOOK: Noncommercial traders were net-short 60,892 contracts of canola as of Dec. 9, the most recent CFTC data. Traders added 40,137 contracts to the previous week’s net-short position.

COMMERCIAL OUTLOOK: Commercial traders held a net-long position of 62,135 contracts of canola as of Dec. 9, the most recent CFTC report. January canola is currently priced C$11.80 below the March futures contract, a carry structure which narrowed slightly over the most recent week and remains among the highest degree of carry for the life of the contracts.

SEASONAL INDEX: Canola prices tend to peak between December and February and bottom in July or August.

PRICE PROBABILITY: The price of front-month (March) canola closed the most recent week at the 8th percentile, a very inexpensive price location for buyers within the five-year range.

VOLATILITY: The three-month price volatility for front-month (March) canola rose to 5% as prices traded sharply lower on the week, falling to nine-month lows for most actively traded canola futures.