Technically Speaking

Weekly Analysis: Livestock Markets

By Darin Newsom , DTN Senior Analyst

Live Cattle: The June contract closed $3.725 lower at $125.375. As expected, the secondary (intermediate-term) trend turned sideways last week as the contract quickly fell to a test of support near $123.40. This price marks the 50% retracement level of the previous rally from $115.475 through the recent high of $131.35. The minor (short-term) downtrend should be nearing its end.

Feeder Cattle: The more active May contract closed $5.675 lower at $155.025. The secondary (intermediate-term) trend turned sideways with resistance pegged near $166.90 and support at the new 4-week low of $153.625. Daily stochastics are nearing the oversold level of 20% indicating the minor (short-term) downtrend could be nearing its end.

Lean hogs: The April contract closed $3.05 lower at $80.85 last week. As expected, the secondary (intermediate-term) trend turned down with the lower weekly close leading to a bearish crossover by stochastics above the overbought level of 80%. Initial support is pegged at $79.40, a price that marks the 33% retracement level of the previous uptrend from $70.25 through the recent high of $83.975. The 50% retracement level is down near $71.10.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.43 1/4, up 3 cents for the week. The secondary (intermediate-term) trend remains sideways with support near $3.29 and initial resistance near $3.49 1/2. Weekly stochastics are bullish above the oversold level of 20% indicating the NCI.X could see continued strength.

Soybean meal: The May contract closed $8.70 higher at $275.30. The secondary (intermediate-term) trend remains up with initial resistance pegged at $287.40. This price marks the 33% retracement level of the previous downtrend from $344.60 through the low of $258.90. Support continues to come from noncommercial short-covering, as indicated by the most recent weekly CFTC Commitments of Traders report.

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

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