Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed $2.475 higher at $104.35. Dec live cattle left a bullish gap on its weekly chart before losing momentum late in the week. This established a doji (candlestick pattern), indicating a trading stalemate and possible move to a minor (short-term) downtrend. Daily stochastics are above the overbought level of 805 and nearing a bearish crossover. As for the weekly chart, a concern remains the elevated market volatility 22.2% while noncommercial traders continue to add to their net-long futures position. Friday's CFTC Commitments of Traders report* showed this group holding a net-long of 19,271 contracts.

Feeder Cattle: The January contract closed $0.50 higher at $116.00. Jan feeders tested initial resistance at $119.975, a price that marks the 23.6% retracement level of the previous downtrend from $150.15 through the contract low of $110.65, before falling back late in the week. This could lead to a minor (short-term) pullback.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Lean hogs: The more active December contract closed $4.95 higher at $46.80 last week. Dec hogs rallied to a new 4-week high, building on the previous week's bullish crossover by weekly stochastics below the oversold level of 20%. This combination confirms the market's move to a secondary (intermediate-term) uptrend.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.11 3/4, up 2 1/4 cents for the week. The secondary (intermediate-term) trend remains up. However, the NCI.X continues to struggle against resistance near $3.12 1/2. While weekly stochastics are bullish, daily stochastics established a bearish crossover above the overbought level of 80%. Combined with a possible double-top on the daily chart between $3.14 3/4 (October 19) and $3.14 (October 27), the minor (short-term) trend now looks to be down with initial support at $3.04 3/4.

Soybean meal: The December contract closed $11.00 higher at $317.50. The secondary (intermediate-term) is up as Dec meal extended its rally beyond initial resistance $323.50. This price marks the 23.6% retracement level of the previous downtrend from $418.70 through the low of $294.10. While weekly stochastics remain bullish, the contract did fall back from its high of $328.80.

*The weekly Commitments of Traders report showed positions held as of Tuesday, October 25.

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

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .