Technically Speaking

Weekly Analysis: Livestock Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Live Cattle: The April contract closed $0.65 lower at $136.35. The secondary (intermediate-term) trend remains up with resistance at $139.025. This price marks the 50% retracement level of the previous downtrend from $155.00 through the low of $123.05. Weekly stochastics continue to move toward the overbought level of 80% as noncommercial traders continue to buy. Friday's CFTC Commitments of Traders report showed this group adding 7,970 contracts to their net-long futures position, putting the total at 13,894 contracts. Major (long-term) resistance on the market's monthly chart remains between $138.90 and $141.40.

Feeder Cattle: The April contract closed $0.625 lower at $158.225. The secondary (intermediate-term) trend remains up with resistance between $159.175 and $166.00. These prices mark the 23.6% and 33% retracement levels of the previous downtrend from $213 through the low of $142.55. Weekly stochastics remain bullish below the overbought level of 80%. However, last week's activity may have set the stage for the minor (short-term) trend to turn down.

Lean hogs: The April contract closed $0.05 lower at $70.80 last week. The secondary (intermediate-term) trend still looks to be nearing a bearish change. Secondary resistance remains at the recent high of $72.225 while stochastics continue to hold above the overbought level of 80%. Major (long-term) resistance remains near $71.05, the 23.6% retracement of the previous downtrend. If the secondary trend turns down it could indicate Wave 1 of the major uptrend has peaked.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.31 1/4, up 1/4 cent for the week. The secondary (intermediate-term) trend remains sideways with support near $3.29. Weekly stochastics are neutral-to-bearish above the oversold level of 20%. National average basis strengthened by 1 1/2 cents last week with Friday's NCI.X coming in 27 cents below the close of the May futures contract.

Soybean meal: The May contract closed $10.30 higher at $270.90. The market looks to be nearing the establishment of a secondary (intermediate-term) uptrend, needing a move above the 4-week high, last week's high, of $271 to confirm. Weekly stochastics posted a bullish crossover below the oversold level of 20% signaling a secondary uptrend is possible.

*The weekly Commitments of Traders report showed positions held as of Tuesday,March 1.

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

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