Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The August contract closed at $121.70, down $2.325 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%, initial resistance is near $125.375, a price that marks the 38.2% retracement level of the previous downtrend from $171.975 (November 2014) through the November 2016 low of $94.30. The 50% retracement level is up at $134.425.

Feeder Cattle: The August contract closed at $152.575, down $2.125 on the monthly chart. Despite the lower monthly close the market remains in major (long-term) 5-wave uptrend. Wave 3 continues to test resistance near $164.725, a price that marks the 38.2% retracement level of the previous downtrend from $245.75 through the low of $114.65. The 50% retracement level is up at $180.20. Monthly stochastics remains bullish and well below the overbought level of 80%.

Lean Hogs: The July contract closed at $83.025, up $9.025 on the monthly chart. Lean hogs look to have reestablished a major (long-term) uptrend, posting a new 4-month high of $83.35 during May. Next resistance is up near $87.05, a price that marks the 50% retracement level of the previous downtrend from $133.425 through the low of $40.70.

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 $298.10, down $17.70 on the continuous monthly chart. Soybean meal posted a bearish outside month during May, with a close below support at $299.90 indicating a possible test of the major low of $258.90 from February 2016. Monthly stochastics are bearish above the oversold level of 20%.

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