Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The June contract closed $5.200 higher at $150.475 last week. The secondary (intermediate-term) trend remains up with resistance pegged between $150.75 and $154.825, the 50% and 67% retracement levels respectively of the previous secondary downtrend from $162.925 through the low of $138.60. Given the continued bullish commercial outlook indicated by the futures spreads, a test of the 67% retracement likely.

Feeder Cattle: The May contract closed $5.675 higher at $215.40 last week. The secondary (intermediate-term) trend remains up. The contract has moved above resistance near $215.10, a price that marks the 50% retracement level of the previous downtrend from $236.325 through the recent low of $193.90, and could now target the 67% retracement level near $222.20.

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Lean hogs: The June contract closed $1.575 lower at $73.85 last week. The secondary (intermediate-term) trend remains down. Stochastics continue to indicate an oversold situation, setting the stage for a possible bullish crossover in coming weeks.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.63, up $0.06 for the week. Despite the higher close, technical indicators continue to show the secondary (intermediate-term) trend is down. However, last week saw the NCI.X rally off its test of support at $3.47, a price that marks the 33% retracement level of the uptrend from $2.81 through the high of $3.80, before rallying to a higher close. This creates a possible break of initial resistance at $3.68 leading to a retest of longer-term resistance at $3.84. This price marks the 50% retracement level of the secondary downtrend from $4.86 through the $2.81 low.

Soybean meal: The May contract closed $3.00 lower at $324.00 last week. The secondary (intermediate-term) trend remains sideways. Resistance is at the recent high of $351.70, a test of the 50% retracement level ($351.00) of the previous downtrend from $409.60 through the low of $292.30. Support is at $314.30, the 67% retracement level of its rally from $292.30 through the high of $358.50.

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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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