Technically Speaking

Monthly Analysis: Livestock Markets

Live Cattle: The February contract closed at $146.65, down $11.275 on the monthly chart. The major (long-term) trend remains down following the bearish crossover by monthly stochastics at the end of December. Initial support is pegged between $141.85 and $137.30, prices that mark the 33% and 38.2% retracement levels of the previous major uptrend from $79.975 (March 2009) through the high of $172.75 (November 2014).

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Feeder Cattle: The March contract closed at $205.20, down $12.125 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. The January low of $195.40 was a test of initial support near $192.40, a price that marks the 33% retracement level of the previous major uptrend from $85.50 (December 2008) through the high of $245.75 (October 2014). If the market is able to rally, initial resistance is between $212.15 and $220.575.

Lean Hogs: The April contract closed at $72.25, down $8.95 on the monthly chart. The major (long-term) trend remains down with the more active April contract settling below support near $73.15. This price marks the 67% retracement level of the previous major uptrend from $43.05 (August 2009) through the high of $133.425 (March 2014). Monthly stochastics are below the oversold level of 20% indicating that the market could begin to stabilize above next support near $64.375, the 76.4% retracement level.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.44, down 20 cents for the month. The major (long-term) trend remains up. The sell-off since the December high of $3.80 has resulted in a test of support at $3.47, the 33% retracement level of the uptrend from $2.81 (October 2014). The NCI.X is expected to test the 50% retracement level of $3.31 during February.

Soybean meal: The March contract closed at $329.90, down $17.70 on the monthly chart. Monthly studies remain a mix of signals with the bullish key reversal at the end of October indicating a major (long-term) uptrend while the last crossover by stochastics was bearish (above 80%) at the end of September 2012. March bean meal closed below support at $335.90, setting up a possible test of its recent low of $295.10.

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