Technically Speaking

Monthly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed at $163.475, up $12.05 for the month. The major (long-term) trend remains up as the December contract established a new high of $165.075 in September. Monthly stochastics remain above the overbought level of 80%, but have for the majority of months since September 2010.

Feeder Cattle: The October contract closed at $235.425, up $18.70 for the month. The major (long-term) trend remains up as the October contract moved to a new all-time high of $236.175 in September. Monthly stochastics are well above the overbought level of 80% but showing no signs of slowing buying interest.

Lean hogs: The December contract closed at $94.25, down $3.60 for the month. The major (long-term) trend is down with support pegged between $92.30 and $82.925. However, the market's long-term 3 to 4 year 6-point cycle chart shows the point-2 low (monthly close) may have occurred this past August. The normal timeframe for a point-2 low is between August and October (for more information, see the Technically Speaking blog post from July 9).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.84, down 55 cents for the month. This is the lowest weekly close since the $2.27 posted at the end of September 2006. It is possible that the NCI.X could find support at the December 2008 low of $2.6890. Monthly stochastics are well below the 20% level, indicating the cash market is sharply oversold. It is possible the NCI.X could see a secondary bullish crossover in the coming months, confirming the initial pattern from February 2014.

Soybean meal: The nearby contract closed at $304.60, down $134.90 for the month. The major (long-term) trend remains down, with next support pegged near $274.80. This price marks the low from December 2011. Monthly stochastics remain above the oversold level of 20%, indicating the market could see continued pressure.

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