Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The August contract closed $2.90 lower at $115.275. August live cattle remain in a secondary (intermediate-term) downtrend following the double-top formation near $127.50 and double bearish crossover by weekly stochastics above the overbought level of 80%. Last week saw the contract test next support near $113.127, a price that marks the 38.2% retracement level of the previous uptrend from $89.875 through the high of $127.50. With weekly stochastics bearish and near the overbought level of 80%, August cattle should soon test the 50% retracement level near $108.70.

Feeder Cattle: The August contract closed $2.925 lower at $144.95. The market's secondary (intermediate-term) trend remains down. The contract posted a new 4-week low of $140.775 last week before rallying back above 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 still near the overbought level of 80%, August feeders should test the 50% retracement level of $136.70 and possibly the 61.8% retracement level of $130.375.

Lean Hogs: The August contract closed $0.475 lower at $78.65 last week. The contract's secondary (intermediate-term) trend remains down following the recent bearish crossover by weekly stochastics above the overbought level of 80%. Initial support is at the 4-week low of $77.60, then near $76.45. The latter marks the 38.2% retracement level of the previous uptrend from $66.325 through the high of $82.70.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.19 1/4, down 26 1/4 cents for the week. The NCI.X abruptly rejoined its previous secondary (intermediate-term) downtrend. The sell-off is a seasonal move as cash corn remains in step with its 3-year and 10-year tendencies. Initial support is at $3.17 1/2, a price that marks the weekly closes from the week of December 5, 2016 (high) and week of March 20, 2017 (low). Weekly stochastics remain bearish.

Soybean meal: The July contract closed $7.30 lower at $293.60. Despite weekly stochastics showing the contract being already technically oversold, July soy meal moved to a new low of $292.00 last week. As the end of the month draws near the market's major (long-term) downtrend is exerting its influence, with support down at the major low of $258.90.

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