Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The June contract closed $3.275 higher at $107.00. June live cattle extended its secondary (intermediate-term) 5-wave uptrend last week as the contract posted a new 4-week high of $107.225. This put it above resistance near $106.40, a price that marks the 38.2% retracement level of the previous downtrend from $121.525 through the low of $96.40. Next targets are the 50% and 61.8% retracement levels of $109.30 and $121.175 respective.

Feeder Cattle: The August contract closed $3.75 higher at $148.25. The contract extended its secondary (intermediate-term) 5-wave uptrend last week. Next resistance is pegged at $149.95, a price that marks the 61.8% retracement level of the previous downtrend from $159.20 through the low of $135.00.

Lean Hogs: The June contract closed $4.925 lower at $72.625. June lean hogs are following general trend patterns closely, with last week's sell-off looking to be Wave 2 of a 5-wave secondary (intermediate-term) uptrend. A characteristic of Wave 2 is an almost complete retracement of Wave 1, with last week's low of $72.475 a test of the Wave 1 retracement level near $72.40. Key to the uptrend is the contract not falling below the low from its previous 3-wave downtrend at $70.25.

Class III Milk: The May contract closed $0.17 higher at $15.07. The market's secondary (intermediate-term) uptrend looks to be nearing its end as the May contract tests resistance at $15.29. This price marks the 23.6% retracement level of the major (long-term) downtrend from $25.30 (September 2014) through the low of $12.20 (May 2016). Weekly stochastics remain above the overbought level of 80%, putting this momentum study in position for a bearish crossover.

Soybean meal: The July contract closed $16.70 higher at $395.30. Technically July soybean meal remains in a secondary (intermediate-term) uptrend, remaining within its range between the high of $400.60 and support at $362.70. However, with soybean meal's forward curve inverted, reflecting bullish fundamentals, a bullish breakout seems imminent. If such a move is seen, next major (long-term) resistance is up at $433.70.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.60, up 15 cents for the week. The NCI took out its previous double-top near $3.54, also erasing a potential head-and-shoulders pattern on its weekly close-only chart. Despite weekly stochastics already well above the overbought level of 80% the NCI has extended its secondary (intermediate-term) uptrend. Next major (long-term) resistance is up near $4.00 on the monthly chart.

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