Technically Speaking

Weekly Analysis: Livestock Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Live Cattle: The more active April contract closed $0.925 higher at $134.00. The key factor in live cattle remains its high volatility, with the weekly figure for the April futures contract calculated at 21.7% last Friday. Trends on both weekly (intermediate-term) and daily (short-term) charts are difficult to discern, with the major (long-term) trend on the monthly chart still sideways in the wide range between $138.90 and December's low of $121.975. For what it's worth, the contract posted a minor reversal on its daily chart Friday near resistance at $135.025. This could lead to a short-term sell-off.

Feeder Cattle: The more active March contract closed $0.65 lower at $157.25. March feeder cattle remain in a wide ranging secondary (intermediate-term) sideways trend between the 4-week high of $166.875 and the 4-week low of $147.775. Retracement resistance is near $165.30, then $171.10. These prices mark the 33% and 50% levels of the previous downtrend from the high of $212.525 through the contract low of $141.70.

Lean hogs: The more active April contract closed $1.70 higher at $70.70 last week. The secondary (intermediate-term) trend is up as the contract moved above resistance near $69.55. This price marks the 67% retracement level of the previous downtrend from $74.70 through the low of $59.225. Weekly stochastics are nearing the overbought level of 80% increasing the markets vulnerability to renewed selling interest.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 1 3/4 cents for the week. The NCI.X looks to have established a secondary (intermediate-term) trend, holding above its recent bullish breakaway gap and moving to a new 4-week high last Friday. Weekly stochastics are also growing more bullish. Initial resistance is pegged near $3.53 1/2, the 33% retracement level of the previous downtrend from $4.05 3/4 through the recent low of $3.27 1/4.

Soybean meal: The March contract closed $3.90 higher at $272.40. While the secondary (intermediate-term) trend remains sideways between resistance at its 4-week high of $277.20 and support at the contract low of $263.8, weekly stochastics are growing more bullish below the oversold level of 20%. This would suggest a stronger likelihood toward a bullish breakout in the coming weeks.

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