Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The April contract closed at $113.75, down $13.75 on the monthly chart. The market remains in a wide-ranging sideways trend on its front-month (rather than most active) continuous monthly chart. April live cattle are testing support near $111.35, a price that marks the 61.8% retracement level of the rally from $94.30 (October 2016) through the high of $138.90 (April 2017). With the role to June occurring this coming month, the market is expected to test the 76.4% retracement level near $104.825.

Feeder Cattle: The May contract closed at $134.025, down $12.075 on the monthly chart. Despite the continued sharp sell-off on the market's monthly chart (more active contract) the major (long-term) remains up. The March close of $134.025 is a test of support near $133.30, a price that marks the 61.8% retracement level of the previous rally from $114.65 through the high of $163.50. If this support fails to hold, the 76.4% retracement level is down near $126.20.

Lean Hogs: The April contract closed at $57.25, down $9.975 on the monthly chart. The nearby April contract has reached an important support area of the previous monthly low at $54.925 (September 2017) to the retracement support at $53.00. A move below the former would indicate the latter could give way, particularly with monthly stochastics still bearish above the oversold level of 20%.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.50 3/4, up 5 1/2 cents for the month. The NCI continues to test trendline resistance, calculated at $3.53 1/2 for March and $3.52 1/4 for April. Monthly stochastics are bullish and below the overbought level of 80%, indicating more room to the upside is possible.

Soybean meal: The May contract closed at $384.00, down $10.70 on the continuous monthly chart. Despite the lower monthly close the market remains in a major (long-term) uptrend on its monthly chart. However, the May contract is finding resistance near $400.30, a price that marks the 50% retracement level of the previous major downtrend from $541.80 through the low of $258.90. Monthly stochastics are still bullish below the overbought level of 80%.

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