Technically Speaking

Monthly Analysis: Livestock Markets

Live Cattle: The August contract closed at $151.275, up $1.575 on the monthly chart. The major (long-term) trend remains down with support between $141.85 and $137.30. These prices mark the 33% and 38.2% retracement levels of previous uptrend from $79.975 (March 2009 low) through $172.75 (November 2014 high). Secondary resistance is pegged at $155.65, the 38.2% retracement level of the initial sell-off from the $172.75 high through the March 2015 low of $145.075. Continued noncommercial buying could push the market to a test of the 50% retracement level near $158.90.

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Feeder Cattle: The August contract closed at $222.95, up $8.25 on the monthly chart. While the major (long-term) trend remains down the market has seen a retracement rally leading to test of resistance at $225.60. This price marks the 61.8% level of the initial sell-off from $245.75 (October 2014 high) through $193.00 (February 2015 low). The latter was a test of support near $192.375, a price that marks the 33% retracement level of the previous uptrend from $85.50 (December 2008 low) through the $245.75 high.

Lean Hogs: The August contract closed at $83.45, up $2.025 on the monthly chart. The major (long-term) trend remains up with resistance between $83.00 and $86.725, prices that mark the 33% and 38.2% retracement levels of the previous major downtrend from $133.425 (March 2014 high) to $57.85 (March 2015 low). Support continues to come from noncommercial buying, with CFTC Commitments of Traders reports showing this group moving to a net-long futures position during May.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.33, down 12 cents for the month. The major (long-term) trend remains up while the secondary (intermediate-term) trend is sideways to down. May saw the NCI.X test support at $3.31, a price that marks the 50% retracement level of the rally from $2.81 (October 2014 low) to $3.80 (December 2014 high). Next support is at the 67% retracement level of $3.14.

Soybean meal: The July contract closed at $305.70, down $13.20 on the continuous monthly chart. The major (long-term) trend remains down with support pegged at the previous low of $302.00 (October 2014). Pressure continues to come from noncommercial selling, with CFTC Commitments of Traders reports showing this group reducing their net-long futures holdings during May. On the other hand, support is coming from commercial buying as the inverse in the market's forward curve continues to strengthen.

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