Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The April contract closed $1.625 higher at $117.60. Despite recent support from commercial buying (as indicated by the strength of the April-to-June futures spread) the secondary (intermediate-term) trend of April cattle remains down. The ongoing rally looks to be Wave B (second wave) of a 3-wave downtrend, a move that has resulted in a 76.4% retracement of Wave A (test of $118.375). Weekly stochastics have turned neutral, with the most recent secondary signal a bearish crossover above the overbought level of 80%. It's possible the contract could see an almost 100% retracement of the peak of Wave A at $120.325.

Feeder Cattle: The April contract closed $3.725 higher at $126.675. Similar to April live cattle, April feeders remain in a secondary (intermediate-term) 3-wave downtrend with the recent rally looking like Wave B of a 3-wave trend. April feeders are testing resistance at $127.30, a price that marks the 67% retracement level of Wave A from $130.625 through the low of $120.625. Daily stochastics show the contract to be nearing a short-term overbought situation.

Lean Hogs: The April contract closed $1.425 higher at $68.175 last week. Despite the higher close the secondary (intermediate-term) trend remains down. However, the contract is holding its test of initial support near $66.80, a price that 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 $3.22 3/4, down 15 3/4 cents for the week. The NCI.X looks to have established a rare expanding triangle top on its weekly close chart. Recent highs have been $3.34, $3.37 1/2, and $3.38 1/2 mixed with lower lows of $3.26 3/4, $3.26 1/4, and this past week's $3.22 3/4. Meanwhile, weekly stochastics are growing more bearish after moving below the overbought level of 80%. Initial support is near $3.18 1/4, a price that marks the 38.2% retracement level of the previous uptrend from $2.85 1/4 through the high of $3.38 1/2.

Soybean meal: The May contract closed $4.30 lower at $328.70. Soybean meal is showing mixed trend signals as the contract continues to post a series of new 4-week lows despite weekly stochastics not having established a bearish crossover above the overbought level of 80%. May meal is testing support at $327.30, the 50% retracement level of the previous uptrend from $299.70 through the high of $354.80. Given continued pressure from commercial selling the contract could fall to the 61.8% retracement level of $320.70.

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

Comments

To comment, please Log In or Join our Community .