Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The April contract closed $1.25 higher at $151.025 last week. The secondary (intermediate-term) trend looks to have turned sideways. Resistance is pegged near $154.05, a price that marks the 38.2% retracement of the sell-off from $166.00 (Wave B high) through $146.65 (Wave C) low that brought about the end of the three wave downtrend from the high of $171.00. April live cattle could pull back to a test of support at $150.65, setting up a potential bullish crossover by weekly stochastics below the oversold level of 20%.

Feeder Cattle: The March contract closed $4.40 higher at $203.85 last week. The secondary (intermediate-term) trend has turned sideways. Support remains between $197.15 and $193.10, prices that mark the 61.8% and 67% retracement levels of the previous uptrend from $172.00 through the contract high of $237.80. Initial resistance is at the 4-week high of $208.375.

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Lean hogs: The April contract closed $3.25 lower at $66.025 last week. The secondary (intermediate-term) trend remains down with the contract moving to a new low of $63.675. However, weekly stochastics are in single digits indicating a sharply oversold situation that could soon lead to a bullish crossover. Pressure continues to come from an increasingly bearish market view of fundamentals, as indicated by action in the April to June futures spread.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.65, up $0.03 for the week. The secondary (intermediate-term) trend remains down while the minor (short-term) trend is up. Minor resistance is between $3.62 and $3.68, prices that mark the 50% and 67% retracement levels of the sell-off from $3.80 through the low of $3.44. Secondary resistance remains at $3.84 with secondary support at $3.47.

Soybean meal: The March contract closed $2.90 higher at $332.30 last week. The secondary (intermediate-term) trend remains sideways with the March contract holding above support at $321.30 while weekly stochastics are neutral to bearish. Market volatility remains high meaning weekly price swings could remain wide. The market's inverted forward curve continues to show a bullish supply and demand situation, with pressure coming from noncommercial interests.

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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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