Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The June contract closed at $138.00, up $18.05 on the monthly chart. The market remains in a major (long-term) 5-Wave uptrend that began at the end of October 2016 with a bullish crossover by monthly stochastics below the oversold level of 20%. With stochastics still bullish below the overbought level of 80%, next resistance is near $142.30, a price that marks the 61.8% retracement level of the previous downtrend from $171.975 (November 2014) through the November 2016 low of $94.30.

Feeder Cattle: The August contract closed at $154.70, up $22.00 on the monthly chart. The market appears to be moving quickly through the 5 waves of a normal uptrend with Wave 1 peaking at December's high of $131.55, Wave 2 bottoming at the February low of $120.50, and Wave 3 extending toward resistance near $164.725. This price marks the 38.2% retracement level of the previous downtrend from $245.75 through the low of $114.65. Monthly stochastics remains bullish and well below the overbought level of 80%.

Lean Hogs: The June contract closed at $74.00, up $0.15 on the monthly chart. Lean hogs remains trendless on its major (long-term) monthly chart. This means the market could remain range-bound, albeit in a wide range between resistance near $87.05 and support at $40.70. Initial support is at the 4-month low of $52.55 with initial resistance at the 4-month high of $78.25.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.25, down 1 1/2 cents for the month. The major (long-term) trend of the NCI.X remains difficult to classify. The best description could be a long-term sideways trend between the low of $2.81 1/2 (October 2014) and $4.10, a price that marks the 23.6% retracement level of the previous downtrend from $8.26 1/4 (August 2012). Still, the new low (and close) of $2.73 from August 2016 remains a problem.

Soybean meal: The July contract closed at $315.80, up $7.40 on the continuous monthly chart. Meal's monthly chart remains a complicated mix of signals. While it could be argued that the ongoing sell-off is Wave 2 of a major (long-term) uptrend, the current pattern looks to be a 3-wave downtrend of its own. Retracement support is pegged at $299.90 with monthly stochastics still neutral in the lower 30% range.

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