Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The June contract closed $3.175 higher at $112.85. As discussed previously, June live cattle challenged its high of $115.65 last week before pulling back slightly at Friday's close. With the old high continuing to hold and weekly stochastics above the overbought level of 80%, the contract could see its secondary (intermediate-term) uptrend soon come to an end.

Feeder Cattle: The May contract closed $3.425 higher at $133.80. May feeders moved to a new high of $136.225 before falling back at Friday's close. Unlike live cattle, weekly stochastics are not above the overbought level of 80%, possibly opening the door to renewed buying interest this week. However, the previous signal by weekly stochastics remains a bearish crossover the week of January 23.

Lean Hogs: The June contract closed $1.575 lower at $75.75 last week. The secondary (intermediate-term) trend remains down with next support remains at 73.375. This price marks the 50% retracement level of the previous uptrend from $66.40 through the high of $80.35. With weekly stochastics still above the oversold level of 20% the contract could target the 67% retracement level near $71.05.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.17 1/4, down 9 3/4 cents for the week. The NCI.X continues to show a rare expanding triangle top on its weekly close chart. The previous week's rally was a minor retracement of the initial sell-off from $3.38 1/2 through $3.22 3/4. Weekly stochastics remain bearish below the overbought level of 80%. The downside targets for the NCI.X (weekly close only) are $3.12 and $3.05 1/2.

Soybean meal: The May contract closed $10.70 lower at $318.20. The contract looks to have firmly established a secondary (intermediate-term) downtrend with last week's sharp sell-off posting a new 4-week low of $316.60. Next support is at $312.70, a price that marks the 76.4% retracement of the previous rally from $299.70 through the high of $354.80.

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