Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The December contract closed $1.85 higher at $166.90. The December contract posted a new high of $170 last week, before falling back slightly at the close. The move to a new high indicates the secondary (intermediate-term) trend remains up, despite the market's high volatility and weekly stochastics that continue to show an overbought situation. If the market turns lower, initial support is at the recent low of $161.80.

Feeder Cattle: The November contract closed $0.50 higher at $234.65. The market continues to indicate the secondary (intermediate-term) trend has turned down. If so the recent high of $245.75 could be considered the fifth point in a possible 5-point top. Initial support is at the recent low of $231.75.

Lean hogs: The December contract closed $0.325 lower at $90.25. Support remains near $89.20, a price that marks the 67% retracement level of the rally from $84.275 (low the week of August 18) through $99.00 (high the week of September 8). Resistance remains near $98.45, the 67% retracement of the previous downtrend from $105.50 (high the week of July 14) through the $84.275 low.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.11, up 5 cents for the week. While technical indicators continue to show the secondary (intermediate-term) trend remains up, seasonally the cash market tends to turn sideways through mid-November. This could lead to a short-term test of support at $2.93. Last Friday's national average basis was calculated at about 42 cents under the December contract, unchanged from the previous week.

Soybean meal: The December contract closed $19.70 higher last week at $350.20. The secondary (intermediate-term) trend remains up, with resistance between $353.50 and $367.00. These prices mark the 50% and 61.8% retracement levels of the previous downtrend from $411.40 through the recent low of $295.10. Futures spreads remain in strong uptrend, reflecting a strengthening inverse indicating an increasingly bullish commercial outlook.

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

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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.

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