Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The June contract closed at $124.025, down $12.95 on the monthly chart. Despite the sharp sell-off the market still looks to be in the early stages of a major (long-term) 5-Wave (Elliott Theory) uptrend. The roll from the April to the June as the most active contract, following the former's test of resistance at $141.375 early in the month, resulted in a bearish outside month. However, June live cattle continue to hold above the previous major low of $121.975.

Feeder Cattle: The May contract closed at $155.25, down $3.825 on the monthly chart. Despite its lower close the market continues to indicate it has moved into a 5-Wave uptrend (Elliott), though Wave 1 has already tested resistance near $165.15. This price marks the 23.6% retracement level of the previous downtrend from $245.75 through the December low of $143.20. Support remains near $146.70.

Lean Hogs: The June contract closed at $80.85, up $10.875 on the monthly chart. The market remains in a major (long-term) uptrend as June futures extended the rally beyond resistance near $78.80. This price marks the 33% retracement level of the previous downtrend from $132.825 through the low of $51.80. However, Wave 1 (of an Elliott 5-Wave pattern) could peak soon despite continued bullish monthly stochastics.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.24, down 5 1/4 cents for the month. The major (long-term) trend is sideways with support pegged near $3.23. This price marks the 67% retracement level of the rally from the low of $2.81 1/2 (October 2014) through the high of $4.05 3/4 (July 2016). If this support fails to hold, next support is at the October 2014 low. Monthly stochastics are well below the oversold level of 20%.

Soybean meal: The May contract closed at $270.30, up $7.80 on the continuous monthly chart. The major (long-term) trend turned up as monthly stochastics established a bullish crossover below the oversold level of 20%. Also, the sharp rally by the May futures contract saw it set a new high for 2016, indicating it may begin to find increased buying interest.

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