Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed $6.725 lower at $100.125. Last week erased all pretense of a secondary (intermediate-term) uptrend. Dec cattle posted a new major (long-term) low of $100.125 before closing at that low. Weekly stochastics have not yet crossed below the oversold level of 20% meaning live cattle could be weeks away from establishing an uptrend.

Feeder Cattle: The November contract closed $10.075 lower at $119.65. Nov feeders posted a new major (long-term) low of $119.425 last week, extending all three downtrends (minor, secondary, major). Weekly stochastics remain above the oversold level of 20% meaning the market could still be weeks away from establishing an uptrend.

Lean hogs: The more active December contract closed $4.925 lower at $43.975 last week. Dec hogs extended its secondary downtrend by moving to a new major (long-term) low of $43.975. Unlike cattle markets though, weekly stochastics are in single-digits indicating a sharply oversold situation and setting the stage for a possible bullish crossover.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.95 1/4, down 1/4 cent for the week. Weekly stochastics continue to indicate the secondary (intermediate-term) trend is up. Initial resistance is at $3.03, a price that marks the 23.6% retracement level of the previous downtrend from $4.00 1/2 through the low of $2.73.

Soybean meal: The December contract closed $3.20 lower at $299.60. Dec bean meal spiked to a new low of $294.10 before rallying slightly to close out the week. With weekly stochastics in single digits, signaling a sharply oversold situation, the market may have established a spike reversal last week. Much will depend on whether or not follow-through buying is seen this coming week.

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