Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The February contract closed $2.45 lower at $118.575. The secondary (intermediate-term) trend remains down with the contract testing support near $118.175. This price marks the 38.2% retracement level of the previous uptrend from $95.875 through the high of $131.95. With weekly stochastics still bearish and above the oversold level of 20% the contract should extend its downtrend to at least the 50% retracement level near $113.90.

Feeder Cattle: The March contract closed $7.000 lower at $138.55. The contract remains in a secondary (intermediate-term) downtrend, falling below support last week at $139.85. This price marks the 50% retracement level of the previous uptrend from $120.775 through the high of $158.925. Next support is the 67% retracement level (Dow Theory) near $133.375. Weekly stochastics are bearish, but still above the oversold level of 20% indicating the contract has more downside potential.

Lean Hogs: The February contract closed $1.45 higher at $69.975. The contract's secondary (intermediate-term) trend still looks to be down. Trendline resistance connecting the highs of $73.30 and $72.25 puts resistance this coming week at $71.00. Support is at the double-bottom low of $66.25 (weeks of November 13 and December 11). The most recent signal by weekly stochastics was a bearish crossover above the overbought level of 80% the week of November 6.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.15, up 6 3/4 cents for the week. Cash corn's secondary (intermediate-term) uptrend continues to strengthen on its weekly close-only chart. Next resistance is near $3.18 3/4, a price that marks the 38.6% retracement level of the previous downtrend from $3.48 through the low of $3.00. The 50% retracement level is up near $3.24 1/4. Weekly stochastics remain bullish but nearing the overbought level of 80%.

Soybean meal: The March contract closed $7.80 lower at $316.70. The contract continues to fall back from its spike high of $351.20, posting a new 4-week low of $316.60 last week. Weekly stochastics are growing more bearish, meaning downside momentum is getting stronger, indicating a test of support at the low of $315.00 (week of November 13) is likely. Below that support is at the low of $299.10 (week of August 21).

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