Technically Speaking

Livestock Markets: Weekly Analysis

Source: DTN ProphetX

Live Cattle: The October contract closed $0.65 lower last week. The secondary (intermediate-term) trend remains down. Resistance is at the recent high of $161.75, a price that also marks the fifth point of what looks to be a 5-point top on the contract's weekly chart. The more active December contract is showing the same pattern, with resistance at its recent high of $163.875.

Feeder Cattle: The October contract closed $2.80 higher last week. While the market is showing a similar pattern to live cattle (a 5-point top), the October contract continues to hold near its recent high of $229.825. This leaves the door open for the contract to post a new high that could still be viewed as the fifth point of the topping pattern. Weekly stochastics are above the 80% level, indicating the market remains in an overbought situation.

Lean hogs: The October contract closed $0.275 higher last week. The secondary (intermediate-term) trend remains up after the nearby October contract posted a bullish outside week last week. However, resistance remains near $109.05, a price that marks the 67% retracement level of the previous downtrend from $118.35 through the low of $90.45.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.02, down 10 3/4 cents for the week. The secondary (intermediate-term) trend remains down, in line with the market's seasonal index through the first week of October. The next major (long-term) price target remains the December 2008 low of $2.69. National average basis (NCI.X minus the futures market) was calculated at about 29 cents under the December contract, 3 cents weaker for the week. Weekly price distribution studies (close only) show the NCI.X nearing the 5-year low of $2.92, the lower 24% of the 10-year, the lower 15% since the beginning of corn's demand market with the 2005-2006 marketing year, and the lower 30% of the range since total domestic demand climbed above 10 bb during the 2003-2004 marketing year.

Soybean meal: The October contract closed $14.40 lower last week. The secondary (intermediate-term) trend remains down. Major (long-term) support is at $274.80, the low from December 2011. Fundamentally the market remains bullish with the forward curve (series of futures spreads) from October 2014 through March 2015 still inverted. However, this price relationship continues to weaken.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .