$533 on the March gives us a spot $11.77 bid into Assiniboia.
$533 was the high set on Jan 9th prior to the USDA on the 12th and a level we have not seen otherwise since Nov 16. $538 marks 38.2 Fib Retracement and while that has been my medium term target since late November, we must respect that 533 is possibly close enough especially in front of a USDA report on Thursday that many are calling for to be Bullish (and thus it had better be Bullish or we likely go lower, leaving a solid double top in place).
If adverse weather in E. Europe, S.American and locally in the Prairies continues, there is potential still to test $550 – 560, so I am only a seller of 50% of my remaining bushels in the 533-538 range, and will ponder the velocity of the move to $550 on the remaining tonnes if it were to occur.
While a breach of $533 should provide a spring board for Fund entry and a nice support level, $538 ($11.88) is a significant resistance level and a critical point in breaking (or more importantly – maintaining) the downtrend. A failure at $538 could result in a test of the $500 lows and a good chance of seeing $480 March or May futures ($10.55 Canola)
Bottom Line – Good sell points ahead but beware Thursday’s USDA. You should not exit the next 2-10 days without getting yourself to 75% Old Crop and possibly as high as 35% New Crop or any combination of 100% Old & New Crop. More on that in this afternoon’s Targets.