Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The August contract closed $1.325 higher at $103.625. August live cattle look to be in Wave 3 of its 5-wave secondary (intermediate-term) uptrend. Confirmation of this would be a move above the Wave 1 high of $106.55, with an upside target area for Wave 3 between $107.775 and $100.175.

Feeder Cattle: The August contract closed $1.40 higher at $146.325. August feeders extended Wave 3 of its 5-wave secondary (intermediate-term) above the Wave 1 high of $149.075. While a characteristic is for an extended Wave 3, the pullback at the end of the week could lead to a quick Wave 4 sell-off.

Lean Hogs: The August contract closed $1.45 higher at $77.525. August hogs extended its Wave 3 of a 5-wave secondary (intermediate-term) uptrend by posting a new 4-week high of $78.90. 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 $0.56 higher at $16.23. The market extended its secondary (intermediate-term) uptrend to a new 4-week high of $16.48 last week. This was a test of resistance at $16.52, a price that marks the 33% retracement level of the previous downtrend from $25.30 through the low of $12.20. Weekly stochastics remain well above the overbought level of 80%, increasing the market's vulnerability to a sell-off.

Soybean meal: The July contract closed $6.10 lower at $374.10. The contract posted a number of bearish signals last week including a bearish outside range and a new 4-week low of $372.10. Both would indicate the secondary (intermediate-term) trend has turned down with next support at $366.40. This price marks the 38.2% retracement level of the previous uptrend from $301.40 through the high of $406.50.

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.59, down 14 cents for the week. The NCI posted a new low 4-week close last week indicating the secondary (intermediate-term) trend on its weekly close-only chart is now down. While the NCI could see a minor (short-term) rally that possible tests its recent high of $3.73, it's expected to test next support at $3.52. This price marks the 23.6% retracement level of the previous uptrend from $2.85 through the $3.73 high.

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