DTN Canola Six Factors

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

NONCOMMERCIAL OUTLOOK: Noncommercial traders were net-short 82,636 contracts of canola as of Dec. 16, the most recent CFTC data. Traders added 21,744 contracts to the previous week’s net-short position.

COMMERCIAL OUTLOOK: Commercial traders held a net-long position of 83,463 contracts of canola as of December 16, the most recent CFTC report. March canola is currently priced C$10.60 below the May futures contract, a carry structure which narrowed (less carry) over the most recent week but remains in a widening (higher carry) trend over 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 11th percentile, an inexpensive price location for buyers within the five-year range.

VOLATILITY: The three-month price volatility for front month (March) canola held at 5% as prices traded higher on the week, finding price support after hitting nine month lows the prior week.