Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The April contract closed at $117.925, up $3.75 on the monthly chart. The market remains in a major (long-term) 5-Wave uptrend. However, the secondary (intermediate-term) downtrend could be viewed as Wave 2 with initial support at $111.50. The February low was $112.075. Below that support is pegged near $108.55 and $105.60. Monthly stochastics remain bullish.

Feeder Cattle: The April contract closed at $125.075, up $2.300 on the monthly chart. The market's major (long-term) trend remains up. However, the January high of $131.75 still looks to be the peak of Wave 1, with Wave 2 likely to bottom out near support at $118.70. This price marks the 76.4% retracement level of Wave 1 from $114.65 through the January high. Monthly stochastics remain bullish below the oversold level of 20%.

Lean Hogs: The April contract closed at $67.60, down $1.65 on the monthly chart. Lean hogs remain in a major (long-term) 5-Wave uptrend. However, the February high of $72.65 looks to be the peak of Wave 1 as the secondary (intermediate-term) trend has turned down on weekly charts. Support is pegged between $62.00 and $56.675, prices that mark the 33% and 50% retracement levels of Wave 1 from $40.70 through the February high.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.30 3/4, up 6 1/2 cents for the month. While the market continues to indicate it's in a major (long-term) 5-Wave uptrend, the spike low of $2.7302 (August 2016) remains a problem. This took the NCI.X below what was the Wave C low of $2.81 1/2 from October 2014, something not normally seen in an uptrend. Also, the NCI.X continues to deal with a bearish reversal posted during June 2016 as it traded outside the May range before closing lower. Still, the NCI.X established a new 4-month high of $3.41 1/2 during February, generally viewed as a bullish signal.

Soybean meal: The May contract closed at $336.40, up $1.80 on the continuous monthly chart. The market remains in a major (long-term) 5-Wave uptrend. The September low of $294.10 was the Wave 2 bottom, retracing 80% of Wave 1 from the low of $258.90 (February 2016) through the high of $432.50 (June 2016). Resistance is pegged at $367.00, a price that marks the 38.2% retracement level of the previous downtrend from $541.80 (September 2012) through the low of $258.90 (February 2016).

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