Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed $3.975 higher at $143.40. The secondary (intermediate-term) uptrend continues to strengthen with the Dec contract leaving a bullish price gap between last week's low of $140.40 and the previous week's high of $139.55. Next secondary resistance is pegged near $147.25, the 67% retracement level of the previous downtrend from $156.825 through the low of $128.10. Major (long-term) resistance is between $145.20 and $150.60.

Feeder Cattle: The more active January contract closed $3.125 higher at $185.50 last week. The secondary (intermediate-term) trend remains up with the Jan contract testing resistance at $189.10. This price marks the 50% retracement level of the previous downtrend from $214.15 through the low of $164.05. The November contract (still registering on the long-term monthly chart) is testing resistance near $194.625, the 33% retracement level of the major (long-term) sell-off from $245.75 through this month's low of $169.10. Friday's CFTC Commitments of Traders report showed noncommercial traders covering 412 contracts of their net-short futures position, reducing it to 465 contracts.

Lean hogs: The December contract closed $1.975 lower at $63.60 last week. Dec lean hogs posted a bearish reversal on its weekly chart indicating the secondary (intermediate-term) trend is now down. This could lead to a test of major (long-term) support $57.80 (low from March 2015) and threaten the idea of a major (long-term) uptrend.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.50, up 5 cents for the week. The secondary (intermediate-term) trend looks to be sideways-to-up, with the NCI.X needing a move beyond its triple-top near $3.64 to signal a bullish breakout. Weekly stochastics are bullish indicating momentum could continue to build. Retracement resistance is pegged between $3.67 and $3.80, prices that mark the 50% and 67% levels of the previous downtrend from $4.06 through the low of $3.28. National average basis firmed 2 cents last week, with Friday's NCI.X coming in 30 cents below the close of the December futures contract.

Soybean meal: The December contract closed $6.90 lower at $305.10. The secondary (intermediate-term) trend remains sideways with the contract consolidating above technical support at $302.90. This price marks the 76.4% retracement level of the previous rally from $286.00 through the high of $357.70. Resistance is at the high of $320.50 (week of August 23). Weekly stochastics are neutral-to-bearish below the oversold level of 20%.

The weekly Commitments of Traders report showed positions held as of Tuesday, October 20.

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