Technically Speaking

Monthly Analysis: Livestock Markets

Live Cattle: The February contract closed at $163.55, down $5.675 on the monthly chart. A bearish crossover above the overbought level of 80% by monthly stochastics indicates the major (long-term) trend has turned down. However, the futures market has seen a number of similar signals over the course of 2014 fail to bring about an end to the major uptrend. The February contract was able to rally off its monthly low $155.10, a price that now acts as support. Resistance remains at the November high of $172.75.

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Feeder Cattle: The March contract closed at $217.325, down $13.75 on the monthly chart. The market extended its major (long-term) downtrend established with the bearish crossover of monthly stochastics at the end of October 2014. However, the March contract held above the previous 4-month low of $207.50 before rallying to close out December. This could lead to consolidation in January.

Lean Hogs: The February contract closed at $81.20, down $7.025 on the monthly chart. The major (long-term) trend remains down with monthly stochastics falling below the oversold level of 20%. Next support is pegged between $77.525 (low from March 2013) and $70.375 (low from September 2012).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.64, up 15 cents for the month. The major (long-term) trend remains up with initial resistance pegged at 44.10, a price that marks the 23.6% retracement level of the previous downtrend from $8.26 (August 2012) through the low of $2.81 (October 2014). Monthly stochastics remain bullish. Also, national average basis strengthen by about 7 cents during December despite the rally in the futures market (see above), closing at 33 cents under.

Soybean meal: The March contract closed at $347.60, down $18.70 on the monthly chart. The major (long-term) trend remains up following the establishment of a bullish key reversal during October 2014. However, the market continues to fall back from its November test of resistance at $418.40, a price that marks the 50% retracement level of the previous downtrend $541.80 (September 2012) through the October 2014 low of $295.10. The futures market is testing support pegged between $356.40 and $335.90.

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