Technically Speaking

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The April contract closed $2.95 higher at $154.65 last week. The secondary (intermediate-term) trend is up. Last week's spike reversal off the low of $145.30, a test of support near $145.825, established a bullish crossover below the oversold level of 20% by weekly stochastics and signaled the end of Wave C of the downtrend that began with the $171.00 high (week of November 17). Initial resistance is near $155.15, the 38.2% retracement of the previous downtrend, though the continued bullish supply and demand indicated by the strength of the April June spread implies a possible test of the 50% and 61.8% retracement levels off $158.20 and $161.25.

Feeder Cattle: The May contract closed $8.575 higher at $207.45 last week. The secondary (intermediate-term) trend is up. Initial resistance is near $208.05, a price that marks the 33% retracement level of the previous downtrend from $236.325 through the recent low of $193.90. The 50% retracement level is near $215.10.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Lean hogs: The April contract closed $1.35 lower at $66.125 last week. Despite the sell-off the secondary (intermediate-term) trend remains up based on the bullish key reversal posted the week of February 17. Support at that week's low of $63.225 should continue to hold, with initial resistance still pegged at $71.349. This price marks the 23.6% retracement level of the previous downtrend from $97.65. Given the weakness of the April to June futures spread, the April contract should have a difficult time seeing much more than a 33% retracement of its previous downtrend, putting the high side target near $74.70.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.62, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. After falling to a low of $3.44, a test of technical support at $3.47, the NCI.X has moved sideways. Weekly stochastics remain neutral to bearish hinting at a second test of support at $3.47.

Soybean meal: The May contract closed $14.70 lower at $327.70 last week. The market remains a mix of technical signals. While stochastics continue to indicate a secondary (intermediate-term) uptrend is in place, the May contract fell hard from its recent test of resistance at $351, a price that marks the 50% retracement level of the previous downtrend from $409.60 through the low of $292.30. Still, this past week's sell-off did not see the contract significantly breach technical support at $325.40 or trendline support at $322.80. This would imply that continued bullish fundamentals, indicated by the market's inverted forward curve, could lead to another rally.

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


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.

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .