Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed $1.625 lower at $102.725. As mentioned last week, the market's minor (short-term) trend did turn down again with minor support pegged between $102.20 and $101.05. These prices mark the 38.2% and 50% retracement levels of the previous short-term uptrend from $96.10 through the high of $106.00. The secondary (intermediate-term) trend remains up.

Feeder Cattle: The January contract closed $1.85 higher at $117.85. While the secondary (intermediate-term) trend remains up, Jan feeders have fallen back from testing resistance near $120.00. This price marks the 23.6% retracement level of the previous downtrend from $150.15 through the low of $110.65. Weekly stochastics are bullish meaning buying enthusiasm should eventually strengthen.

Lean hogs: The December contract closed $0.65 lower at $46.15 last week. After posting a classic 2-wave downtrend from $67.325 through the low of $40.70, Dec hogs now look to have begun a 3-wave uptrend. The contract posted another new 4-week high of $48.15 before falling back to end the week. Wave 1 is expected to reach at least $49.55, a price that marks the 33% retracement level of the previous downtrend. While weekly stochastics are growing more bullish, buying interest could begin to slow due to the market's high volatility.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.06 1/4, down 5 3/4 cents for the week. While the secondary (intermediate-term) trend remains up the minor (short-term) trend is down. The NCI.X has held initial minor support at $3.04 3/4 as daily stochastics approach the oversold level of 20%. If this support fails, the next line is drawn at $3.00 3/4 then $2.98 3/4.

Soybean meal: The December contract closed $8.50 lower at $309.00. While the secondary (intermediate-term) trend remains up, the market's minor (short-term) trend is down. Minor support is pegged at $305.70, a price that marks the 67% retracement level of the previous minor uptrend from $294.10 through the high of $328.80. The 76.4% retracement level is down at $302.30.

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