Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The June contract closed at $106.10, down $7.65 on the monthly chart. The market remains in a wide-ranging sideways trend on its front-month (rather than most active) continuous monthly chart. June live cattle are testing support near $104.825, a price that marks the 76.4% retracement level of the rally from $94.30 (October 2016) through the high of $138.90 (April 2017). If this support doesn't hold, live cattle could fall back to the October 2016 low.

Feeder Cattle: The May contract closed at $140.175, down $12.075 on the monthly chart. The market remains in a major (long-term) uptrend on its continuous (front-month) chart. April's low of $128.575 was a test of support near $128.95, a price that marks the rally from $118.90 (October 2016 low) through $161.50 (November 2017 high). Note the 2017 high was another test of resistance near $160.575, a price that marks the 33% retracement level of the previous major downtrend from $245.20 (October 2014 high).

Lean Hogs: The June contract closed at $72.70, down $3.85 on the monthly chart (most active). Lean hogs remain in a major (long-term) sideways-to-up trend as the June contract posted a new 4-month high of $79.10. Support is at the March low of $62.825.

Class III Milk: The May contract closed at $15.18, up $0.91 on the market's monthly chart. The market remains in a wide-ranging major (long-term) sideways trend between $12.20 (May 2016 low) and $18.01 (August 2016 high). The May contract was testing resistance at $15.29, a price that marks the 23.6% retracement level of the previous major downtrend from $25.30 through the $12.20 low.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.63, up 13 cents for the month. The NCI is in a major (long-term) uptrend, with the ongoing rally looking to be Wave 3 of a 5-wave pattern. The April settlement of $3.63 is a test of resistance at $3.62, a price that marks the 76.4% retracement level of the previous downtrend from $3.89 through the low of $2.73. Seasonally the NCI could be nearing a top, and if so, the next sell-off would be viewed as Wave 4.

Soybean meal: The July contract closed at $393.80, up $9.80 on the continuous monthly chart. The market remains in a major (long-term) uptrend on its monthly chart, with the July contract testing resistance at $400.30. This price marks the 50% retracement level of the previous major downtrend from $541.80 through the low of $258.90. Monthly stochastics are nearing the overbought level of 80%.

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