Targets
All posts tagged Targets
$534 on the March gives us a spot $11.81 bid into Assiniboia. I’m a small Seller today.
In front of a decently important USDA report tomorrow morning it would be remiss of me not to take the $11.81 that’s in front of us and roll the dice on a good report for just another 10 cents. I therefore will be moving sales up by another 10% today on the spot month contract – moving to 75% sold Canola.
I believe the report will be mildly Bullish and the Charts are certainly in our favour, however risk is present on four fronts: 1) Expectations are for a Bullish report and so limited upside without a strongly Bullish report. 2) Big rains in Argentina are being ignored and could become a focus once report is out of the way. 3) The Outsides are getting overbought and Greece is playing politics – and have a few years of experience on that front. 4) Technically we’ve broken a pennant to the upside, but have not confirmed a takeout of the January highs so any drop here will install a pretty solid double top at an already strong Resistance plane.
Targets out imminently – this note is background on the forthcoming Canola recommendation. All things being equal, if it was not a report day tomorrow, I would not be selling today – hence 10% instead of 15%.
$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.
$$CanolaWatch – a mildly Bullish pennant formation is coming to a breakout point perfectly in line with Friday’s StatsCan. Will be interesting and a market-moving report as industry has them pegged to bump up ’10/’11 yields/production again. I believe StatsCan has been increasing Old Crop production number more on the high “Delivery Rate to Date” than on actual Survey Data.
To me, the high Delivery Rate is more a function of high harvest price and 2008 type fear than their formula that tells them it’s due to an underestimated crop size – but I must respect that I may be wrong and them right. Choose a side on that distinction ahead of Friday because with a wedge shape pattern going into it, it is likely to be a Short Term catalyst that breaks us one way or the other into a more Medium term trend and if Bearish, it probably depresses prices longer than you can hold Old Crop.
If you find these Texts too long for texting, let me know and I’ll set up a private Blog and will link a Text to it in the future (need smart phone). Emails take us out of “real-time” info.
