Technically Speaking

Weekly Analysis: Livestock Markets

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
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Source; DTN ProphetX

Live Cattle: The August contract closed $3.025 higher at $117.80. 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 recent rally can be attributed to a minor (short-term) uptrend on the contract's daily chart resulting in a test of resistance near $118.25, but could extend its minor uptrend to $120.05 before daily stochastics climb above the overbought level of 80%.

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Feeder Cattle: The August contract closed $9.250 higher at $154.275. Despite the higher weekly close the contract remains in a secondary (intermediate-term) downtrend. Trendline resistance this week is at $157.80, a price that corresponds to minor (short-term) resistance on the daily chart between $154.80 and $158.15. Daily stochastics are above the overbought level of 80%, setting the stage for a possible move to a new minor downtrend.

Lean Hogs: The August contract closed $3.325 lower at $79.90 last week. The spike reversal signaling a move to a secondary (intermediate-term) downtrend from the previous week still looks to be in place. The contract is moving toward next support at $78.10, a price that marks the 38.2% retracement level of the previous uptrend from $66.325 through the recent high of $85.375. Given the proximity of weekly stochastics to the overbought level of 80%, August lean hogs should be able to extend this downtrend to at least the 50% retracement level of $75.85.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.31 3/4, down 16 cents for the week. The NCI.X remains in a secondary (intermediate-term) sideways trend on its weekly close-only chart. Resistance is at the previous high of $3.48 (week of June 5) and support the low of $3.19 1/4 (week of June 19).

Soybean meal: The August contract closed $7.00 lower at $323.70. While the contract's secondary (intermediate-term) trend still looks to be up, it's minor (short-term) trend quickly changed from up to down last week after a test of secondary resistance at $340.00. This price marks the 76.4% retracement level of the previous secondary downtrend from $354.40 through the recent low of $293.50. Minor support is now pegged at $316.90, $311.80, and $305.40.

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