Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The October contract closed $1.675 lower at $146.85. After testing resistance at $149.725 October live cattle posted a bearish outside week, indicating the minor (short-term) uptrend had come to an end and the secondary (intermediate-term) downtrend was being rejoined. Weekly stochastics remain bearish above the oversold level of 20% leaving open the possibility of moving below its previous low of $143.30 to test major (long-term) support between $141.95 and $137.40.

Feeder Cattle: The October contract closed $0.85 lower at $207.425 last week. The secondary (intermediate-term) trend remains down with the contract posting a bearish outside week last week. Weekly stochastics remain bearish indicating a test of support between $195.00 (secondary) and $192.40 (major, long-term) is likely.

Lean hogs: The October contract closed $1.20 higher at $65.325 last week. Weekly stochastics continue to indicate the secondary (intermediate-term) trend is down. Consolidating activity over the last five weeks looks to be a short-term sideways trend with resistance at the recent high of $67.70 and support at the contract low of $59.45.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.39, down 8 cents for the week. The NCI.X posted a sharp sell-off last week from Monday's high of $3.65 through Wednesday's low of $3.32. The major (long-term) trend remains up with support at $3.31, a price that marks the 50% retracement level of the rally from $2.81 through the high of $4.06. Another key support level is the June low $3.29. A breach of these support levels could set the NCI.X on a path back to last October's low of $2.81. Monthly stochastics remain bullish while weekly stochastics are neutral to bearish.

Soybean meal: The more active December contract closed $18.50 lower at $314.20. The market is a confusing mix of technical signals with last week's action establishing a bearish outside pattern one week after posting a bullish reversal. Dec meal remains within striking distance of support at $309.90, a price that marks the 67% retracement level of its previous rally from $286.00 through the high of $357.70. Support continues to come from the inverted December to January futures spread, reflecting a bullish commercial outlook. However, Friday's CFTC Commitments report showed noncommercial interests reducing their net-long futures position by 4,798 contracts. Weekly stochastics are neutral to bearish.

The weekly Commitments of Traders report showed positions held as of Tuesday, August 11.

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