Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December (most active) contract closed $1.375 lower at $137.00. After posting a new low of $131.70 last week, Dec live cattle posted a strong rally allowing weekly stochastics to establish a bullish crossover below the oversold level of 20%. While the market could see a couple of weeks of sideways to higher consolidation, the major (long-term) trend remains down with a target near $126.50, a price that marks the 50% retracement level of the previous major uptrend from $80.225 through the high of $172.75.

Feeder Cattle: The November contract closed $2.025 lower at $181.60 last week. The sharp rally off its new contract low of $174.05 allowed weekly stochastics to establish a bullish crossover below the oversold level of 20%. This could lead to a secondary (intermediate-term) consolidation phase over the coming weeks. However, the market's major (long-term) trend remains down with a target of $165.60. This price marks the 50% retracement level of the previous major uptrend from $85.45 through the high of $245.75.

Lean hogs: The December (most active) contract closed $1.625 higher at $65.775 last week. The secondary (intermediate-term) trend remains up, with weekly stochastics nearing the overbought level of 80%. The secondary trend is in line with the major (long-term) uptrend that still looks to be in the early stages of Wave 3 of a 5-Wave uptrend cycle.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.55, up 12 cents for the week. The secondary (intermediate-term) trend remains sideways-to-up with resistance at $3.67. This price marks the 50% retracement level of the sell-off from $4.06 through the low of $3.28. If the NCI.X were to climb above the August high $3.65 by the end of the month, and close above the August settlement of $3.40, it would establish a bullish outside month on the long-term monthly chart. This would confirm the major trend remains up.

Soybean meal: The more active December contract closed $0.40 higher at $308.20. Dec bean meal is showing conflicting technical signals with last week's new 4-week low offset by a higher weekly close. The contract continues to hold near support at $302.90, a price that marks the 76.4% retracement level of the previous rally from $286.00 through the high of $357.70. Weekly stochastics remain neutral-to-bearish, above the oversold level of 20%.

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