Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The June contract closed $2.175 higher at $109.675. Last week's strong rally looks to have returned the market to a secondary (intermediate-term) uptrend. June took out its previous high of $109.625 with its high of $110.00, closing above resistance near $109.15. The latter price marks the 76.4% retracement level of the previous downtrend from $114.65 through the low of $91.30, and with weekly stochastics bullish below the overbought level of 80% the contract could look to challenge its previous high.

Feeder Cattle: The May contract closed $4.60 higher at $130.375. Similar to live cattle, May feeders have reestablished the previous secondary (intermediate-term) uptrend with a move to a new weekly high of $130.65. With weekly stochastics turning bullish below the overbought level of 80% the contract could soon test its high of $135.50.

Lean Hogs: The June contract closed $0.425 higher at $77.325 last week. Despite the higher close the secondary (intermediate-term) trend remains down. Initial support remains at the 4-week low of $75.925. The recent rally on the weekly chart continues to look like Wave B (second wave) of a 3-wave downtrend. Confirmation of this would be a move to a new 4-week low.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.27, up 4 cents for the week. The NCI.X continues to show a rare expanding triangle top on its weekly close chart. Last week's rally looks to be the beginning of an expected 50% retracement of the previous sell-off from $3.38 1/2 through $3.22 3/4. This puts the target (again, weekly close only) at $3.30 1/2. Weekly stochastics remain bearish below the overbought level of 80%.

Soybean meal: The May contract closed $0.20 higher at $328.90. While the contract's secondary (intermediate-term) trend remains sideways, its minor (short-term) trend turned up last week. Ultimately this could lead to a retest of secondary resistance between $349.30 and $356.50, prices that mark the 67% and 76.4% retracement levels of the previous downtrend from $374.00 through the low of $299.70.

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