Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The August contract closed $1.025 higher at $116.30. Despite the higher weekly close, 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%. The contract's recent break of its previous low of $116.775 signals an extended sell-off to $106.05. When realized this would be a test of support between $108.70 and $105.25, prices that mark the 50% and 61.8% retracement levels of the previous uptrend from $89.875 through the high of $127.50. Weekly stochastics remain bearish.

Feeder Cattle: The August contract closed $2.975 higher at $142.925. The market's secondary (intermediate-term) trend remains down with a next target of $136.70. This price marks the 50% retracement level of the previous secondary uptrend from $109.90 through the high of $163.50. Weekly stochastics are still bearish.

Lean Hogs: The August contract closed $5.10 higher at $83.75 last week. August hogs posted a number of bullish secondary (intermediate-term) technical signals including a bullish outside week and a new high, all despite being technically overbought. Lean hogs are a good example of a secondary trend being driven by the market's major (long-term) uptrend. Next major resistance is near $87.05, a price that marks the 50% retracement level of the previous major 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 $3.34 3/4, up 15 1/2 cents for the week. The NCI.X is in a secondary (intermediate-term) sideways trend on its weekly close-only chart with resistance at the high of $3.48 (week of June 5) and support the low of $3.19 1/4 (week of June 19). Given the minor (short-term) trend of the NCI.X has turned up, cash corn could look at testing the high-end of its sideways range.

Soybean meal: The August contract closed $11.10 higher at $306.20. August bean meal looks to have established a 2-week reversal, confirming the move to a secondary (intermediate-term) uptrend signaled by a bullish crossover below the oversold level of 20% by weekly stochastics the week of May 30. The contract is already testing initial resistance at $307.90, a price that marks the 23.6% retracement level of the previous downtrend from $354.40 through the recent low of $293.50. The 38.2% retracement level is up at $316.80, with the 4-week high sitting at $311.50.

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