Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The April contract closed $1.025 higher at $115.975. April live cattle remain an interesting technical study. Its secondary (intermediate-term) trend turned down with the high of $120.325 (week of January 17), a test of the 67% retracement level of the previous secondary downtrend from $132.525 through the low of $97.25. Wave A (first wave) of the downtrend resulted in a low of $112.075, a test of the 33% retracement level of the previous uptrend from $97.25 through the $120.325 high. Now Wave B (second wave) looks to have peaked near resistance at $118.375, the 76.4% retracement level of Wave A. Based on 3-wave analysis, the next move should take the contract back to support near $108.80. Weekly stochastics remain bearish below the overbought level of 80%.

Feeder Cattle: The April contract closed $1.40 higher at $122.95. Similar to April live cattle, April feeders remain in a secondary (intermediate-term) 3-wave downtrend. Initial support is at $119.775, the 50% retracement level of the previous uptrend from $108.925 through the high of $130.625, though continued bearish weekly stochastics would suggest a deeper retracement to the 67% level of $116.15.

Lean Hogs: The April contract closed $1.275 lower at $66.75 last week. The secondary (intermediate-term) trend remains down as the contract tests initial support near $66.80. This price marks the 33% retracement level of the previous uptrend from $55.05 through the high of 72.65. Weekly stochastics remain bearish following a crossover above the overbought level of 80% the week of February 6. The 50% retracement level is down at $63.85.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.38 1/2, up 12 1/4 cents for the week. Cash corn resumed its seasonal secondary (intermediate-term) uptrend with next resistance near $3.42 3/4. This price marks the 50% retracement level of the previous downtrend from $4.00 1/2 through the low of $2.85 1/4. However, the market remains overbought and showing signs of building a longer-term top.

Soybean meal: The May contract closed $2.70 lower at $333.00. The secondary (intermediate-term) trend is sideways though the contract posted another new 4-week low of $330.50 last week. Its minor (short-term) downtrend is nearing its end with support between $334.10 and $329.30.

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