Technically Speaking

Weekly Analysis: Livestock Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Live Cattle: The February contract closed $5.325 lower at $127.55. The minor (short-term) downtrend strengthened last week leading to a test of support at $127.275. This price marks the 67% retracement level of the previous uptrend $121.975 through the high of $137.875. Daily stochastics are approaching the oversold level of 20%. The secondary (intermediate-term) trend remains sideways as the contract tests support. Noncommercial traders continue to liquidate their net-long futures position, with Friday's report showing a reduction of 1,683 contracts.

Feeder Cattle: The March contract closed $7.05 lower at $150.275. The minor (short-term) trend strengthened last week with the futures contract testing support near $150.10. This price marks the 67% retracement level of the previous uptrend from $141.70 through the high of $166.875. Daily stochastics are nearing the oversold level of 20%. The secondary (intermediate-term) trend remains sideways.

Lean hogs: The February contract closed $2.175 higher at $62.025 last week. The secondary (intermediate-term) trend remains sideways. However, the minor (short-term) uptrend looks to be nearing an end with daily stochastics above the overbought level of 80% as the futures contract tests technical resistance near $62.225. Last week's high was $62.675.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.40 1/4, up 6 3/4 cents for the week. The secondary (intermediate-term) trend is sideways, with support between $3.29 and $3.23. Resistance is at the high near $3.56 3/5 (week of November 30). Weekly stochastics remain neutral near the oversold level of 20%.

Soybean meal: The March contract closed $2.00 higher at $270.70. The secondary (intermediate-term) trend turned sideways between the 4-week low of $263.80 and the 4-week high of $284.50. Weekly stochastics established a bullish crossover below the oversold level of 20%, indicating a possible move to an uptrend. Despite pressure seen late last week the minor (short-term) trend remains up.

The weekly Commitments of Traders report showed positions held as of Tuesday, January 12.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

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