Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The February contract closed at $111.95, up $8.625 on the monthly chart. November saw the market build on its spike reversal from October, with February live cattle closing near the monthly high of $112.525. Monthly stochastics remain bullish, at or below the oversold level of 20%, confirming the market's major (long-term) trend is up with an initial price target of $121.625. This price marks the 33% retracement level of the previous downtrend from $172.75 (November 2014) through the low of $96.10 (October 2016).

Feeder Cattle: The January contract closed at $128.425, up $14.425 on the monthly chart. As discussed last month, the October low of $114.65 looks to be the bottom of Wave C meaning the market's major (long-term) 3-wave downtrend has come to an end. The November close near the monthly high of $128.725 established a bullish crossover by monthly stochastics below the oversold level of 20%, again indicating the major trend has turned up. If so the initial target is near $145.60, a price that marks the 23.6% retracement level of the previous downtrend from $245.75 (October 2014) through the low of $114.65 (October 2016).

Lean Hogs: The February contract closed at $55.225, up $7.725 on the monthly chart. The market was able to build off the potential spike reversal seen in October, with the February contract closing near its monthly high of $57.325. If the major (long-term) trend has turned up, its initial target is near $62.60. This price marks the 23.6% retracement level of the previous downtrend from $133.425 (March 2014) through the low of $40.70 (October 2016).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.01 1/2, down 9 3/4 cents for the month. Though monthly stochastics remain bullish, the market's major (long-term) trend still looks to be sideways. Support is at the 4-month low of $2.73 (August 2016) and resistance thee 4-month high of $3.14 3/4 (October 2016). A breakout will be signaled when the NCI.X moves outside of that range.

Soybean meal: The January contract closed at $318.30, up $2.20 on the continuous monthly chart. Despite the ongoing consolidation pattern the market remains in a major (long-term) 5-Wave uptrend. The September low of $294.10 continues to look like a Wave 2 bottom, retracing 80% of Wave 1 from the low of $258.90 (February 2016) through the high of $432.50 (June 2016).

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