Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The October contract closed $5.00 lower at $144.125. The secondary (intermediate-term) trend remains down and weekly stochastics bearish. Next secondary support could be between the previous low of $142.375 (week of February 2, 2015) and the spike low of $141.275 (week of February 23). The major (long-term) trend remains down with support on the continuous monthly chart (most active contract) between $141.95 and $137.40, prices that mark the 33% and 38.2% retracement levels of the previous major uptrend from $80.225 through the high of $172.75.

Feeder Cattle: The August contract closed $5.525 lower at $209.675 last week. The secondary (intermediate-term) trend remains down with next support near $207.05, a price that marks the 67% retracement level of the previous uptrend from $196.675 through the high of $227.80. Weekly stochastics are bearish indicating pressure should continue to be seen. The major (long-term) trend is down with support pegged near $192.35.

Lean hogs: The October contract closed $0.575 higher at $64.025 last week. Weekly charts continue to show no clear signals toward the secondary (intermediate-term) trend. However, a rally next week take the October contract above resistance at the 4-week high of $66.525, establishing a potential secondary uptrend. The market in general looks to be near the end of Wave 2 of a major (long-term) 5-Wave uptrend as the more active October contract tests support near $64.35, the 76.4% retracement level of the Wave 1 rally from $57.85 (March 2015) to $85.325 (May 2105).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.61, down 25 cents for the week. The NCI.X followed the previous week's bearish reversal with a bearish gap lower. However, weekly stochastics indicate the secondary (intermediate-term) trend is sideways-to-down rather than down, meaning support could emerge near $3.55. This price marks the 67% retracement level of the rally from $3.29 through the recent high of $4.06. Cash corn's major (long-term) trend remains up.

Soybean meal: The August contract closed $6.30 lower at $354.880. Despite the lower weekly close the secondary (intermediate-term) trend remains up. The contract consolidated within the previous week's range that included a new 4-week high $372.10. Weekly stochastics remain bullish, just below the overbought level of 80%. While further consolidation could be seen in the weeks ahead, the long-term commercial view of supply and demand is bullish and should continue to support the major (long-term) uptrend.

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