Technically Speaking

Weekly Analysis: Livestock Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Live Cattle: The August contract closed $6.575 lower at $118.175. August live cattle still look to be in a secondary (intermediate-term) downtrend based on the double-top formation near $127.50 and double bearish crossover by weekly stochastics above the overbought level of 80%. If the August contract moves below the interim (between double-tops) low of $116.75 (red dashed line on top chart) it would be projected to test support at the 50% retracement level near $106.70.

Feeder Cattle: The August contract closed $6.30 lower at $147.875. The market's secondary (intermediate-term) trend remains down. The contract posted a new 4-week low of $144.75 last week with initial support at $143.025. This price marks the 38.2% retracement level of the previous uptrend from $109.90 through the high of $163.50. With weekly stochastics bearish and having just moved below the overbought level of 80%, August feeders should test the 50% retracement level of $136.70 or possibly the 61.8% retracement level of $130.375.

Lean Hogs: The August contract closed $2.925 lower at $79.125 last week. The contract contract's secondary (intermediate-term) trend turned down last week as weekly stochastics established a bearish crossover above the overbought level of 80%. Though Aug hogs closed back above initial support near $78.85, a price that marks the 23.6% retracement level of the previous uptrend from $66.325 through the recent high of $82.70, a test of $76.50 and $74.50 is likely. These prices mark the 38.2% and 50% retracement levels.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.45 1/2, down 2 1/2 cents for the week. Cash corn remains an interesting market, showing a secondary (intermediate-term) uptrend dating back to August 2016 when the NCI.X posted a low of $2.73. Weekly stochastics have climbed above the overbought level of 80% as the NCI.X approaches resistance at $3.51 3/4. This price marks the 61.8% retracement level of the previous downtrend from $4.00 1/2 through the August 2016 low.

Soybean meal: The July contract closed $5.00 lower at $300.90. July soybean meal looks to be in a secondary (intermediate-term) sideways trend. Resistance is at the 4-week high of $309.80, a price also near the 23.6% retracement level of the previous downtrend from $357.20 through the recent low of $296.60 at $310.90. Weekly stochastics are neutral-to-bullish below the oversold level of 20%.

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