Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The February contract closed $1.875 lower at $117.375. The contract remains in a 3-wave secondary (intermediate-term) downtrend. The ongoing Wave C (third wave) has moved below the Wave A low of $117.575 and could now test next support near $113.90. This price marks the 50% retracement level of the previous uptrend from $95.875 through the high of $131.95.

Feeder Cattle: The March contract closed $0.675 higher at $142.65. The contract remains in a secondary (intermediate-term) 3-wave downtrend, However, weekly stochastics are near the oversold level of 20%, possibly limiting new selling interest.

Lean Hogs: The more active April contract closed $1.75 lower at $74.325. The contract moved into a secondary (intermediate-term) downtrend last week as it posted a bearish reversal. This means it traded outside the previous week's range before closing lower for the week. Last week's low of $74.325 was a test of initial support near $74.05, a price that marks the 23.6% retracement level of the previous uptrend from $63.75 through last week's high of $77.25. Next support is at the 38.2% retracement level near $72.10.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.13 1/2, down 3 3/4 cents for the week. As discussed last week, the NCI rolled over into a secondary (intermediate-term) downtrend last week. After leaving a bearish gap, part of an island reversal, the NCI closed at its low calculation for the week. Furthermore, weekly stochastics established a bearish crossover above the overbought level of 80% confirming a bearish rolling of trend. Support is pegged at $3.10, a price that marks the 38.2% retracement level of the previous uptrend from $2.95 1/4 through the recent high of $3.19. However, the market's major (long-term downtrend is expected to pull the NCI below the previous low.

Soybean meal: The March contract closed $4.90 lower at $310.30. A week after posting a bullish outside range, indicating a possible move to a secondary (intermediate-term) uptrend, March meal fell to a new 4-week low of $310.30. It could still be argued, from a technical point of view, the secondary trend remains up. However, the market's weekly close-only chart is showing a seasonal sideways trend.

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