Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The August contract closed $6.20 lower at $98.225. August live cattle extended Wave 2 of the 5-wave secondary (intermediate-term) uptrend to a test of the previous low of $97.625. A near 100% is characteristic of Wave 2, though the contract does need to find renewed buying interest to begin Wave 3 without setting a new low. Wave 3 is expected to take out the Wave 1 high of $106.55, with an upside target area between $107.775 and $100.175.

Feeder Cattle: The August contract closed $6.275 lower at $137.625. Similar to live cattle, August feeders extended Wave 2 of its 5-wave secondary (intermediate-term) uptrend to a test of the previous low of $135.00. August feeders have more room to move lower without setting a new low, indicating some follow-through selling could be seen early this coming week.

Lean Hogs: The August contract closed $0.325 lower at $76.625. August hogs continue to indicate it's in Wave 3 of a 5-wave secondary (intermediate-term) uptrend, despite last week's lower close. Next resistance is the Wave 1 peak of $81.00, then near $82.05. The latter marks the 76.4% retracement level of the previous downtrend from $85.00 through the low of $72.45.

Class III Milk: The June contract closed $0.20 lower at $15.66. The market extended its secondary (intermediate-term) uptrend to last week's high of $16.14 before falling to a lower weekly close. This allowed weekly stochastics to establish a bearish crossover above the overbought level of 80%, signaling a possible change to a secondary downtrend. Confirmation of this would be a move to a new 4-week low below $14.90.

Soybean meal: The July contract closed $2.30 lower at $376.30. The contract continues to move toward a secondary (intermediate-term) downtrend with last week's close near the weekly low of $374.30 setting the stage for a potential new 4-week low below $373.80.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.68, up 7 cents for the week. The NCI continues to consolidate below its recent high of $3.72, with weekly stochastics above the overbought level of 80%. Support is at last week's low of $3.61 with resistance the recent high of $3.72.

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