Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The June contract closed $1.025 higher at $152.525 last week. The secondary (intermediate-term) trend is up, though the contract looks to have established a potential double-top formation near resistance at $154.825. This price marks the 67% retracement level of the previous downtrend from $162.925 through the low of $138.60. Weekly stochastics remain bullish, indicating the contract could eventually poke through this resistance. If the contract follows through on late week weakness, support remains at $146.175.

Feeder Cattle: The August contract closed $0.775 higher at $218.40 last week. The contract is testing resistance near $222.20, a price that marks the 61.8% retracement level of the initial sell-off from $237.95 through the low of $196.675. This is also a test of the previous high of $221.45 from the week of April 6 when the contract posted a bearish reversal. Weekly stochastics are nearing the overbought level of 80%.

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Lean hogs: The June contract closed $1.475 lower at $83.35 last week. Despite the lower weekly close the secondary (intermediate-term) trend remains up. However, the contract has found renewed selling interest near resistance at $85.85, the 50% retracement level of the previous secondary downtrend from $99.65 through the low of $72.05. Weekly stochastics are bullish but nearing the overbought level of 80%.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.47, up 2 cents for the week. The secondary (intermediate-term) trend remains sideways, though could soon turn up given the bullish reversal seen the previous week. Weekly stochastics are below the oversold level of 20% and could work toward establishing a bullish crossover, confirming the recent technical pattern of the NCI.X. Support remains at $3.42, a price that marks the 38.2% retracement level of the previous uptrend from $2.81 through the high of $3.80.

Soybean meal: The July contract closed $10.10 lower at $303.30 last week. The market resumed its secondary (intermediate-term) downtrend as July bean meal fell below trendline support. Next support is at the contract low of $294.40. Weekly stochastics are below the oversold level of 20%.

The weekly Commitments of Traders report showed positions held as of Tuesday, May 12.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

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