Technically Speaking

Monthly Analysis: Livestock Markets

Live Cattle: The June contract closed at $153.325, up $0.625 on the monthly chart. The switch from the April to June as the most active contract created a bullish key reversal on the monthly chart for most active contracts. However, other technical signals continue to indicate the major (long-term) trend remains down. Bullish fundamentals, indicated by the futures spreads, could result in a test of resistance between $158.90 and $165.55, prices that mark the 50% and 67% retracement levels of the initial sell-off from $172.75 (November 2014 high) to $145.075 (March 2015 low).

Feeder Cattle: The May contract closed at $216.90, up $16.575 on the monthly chart. While the major (long-term) trend remains down, the market is in the middle of a solid retracement rally. From the February low of $193.00, a test of support near $192.40, the more active futures contract has moved to a test of resistance at $219.375. This price marks the 50% retracement level of the initial sell-off from the October 2014 high of $245.75. The 67% retracement level is up near $228.20.

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Lean Hogs: The June contract closed at $75.80, up $8.325 on the monthly chart. The switch from the April contract to the June contract created a bullish key reversal on the monthly chart, indicating the establishment of a major (long-term) uptrend. Monthly stochastics confirm this with a bullish crossover below the oversold level of 20%. The market could look to consolidate between resistance near $75.70 and $83.00, prices that marks the 23.6% and 33% retracement levels of the previous major downtrend from $133.425 (March 2014 high) to $57.85 (March 2015 low).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.55, down 10 cents for the month. The major (long-term) trend remains up, while the secondary (intermediate-term) trend is sideways to down. Support remains at $3.31, a price that marks the 50% retracement level of the rally from $2.81 (October 2014 low) to $3.80 (December 2014 high). The long-term price target remains $4.90, the 38.2% retracement level of the previous major downtrend from $8.26

(August 2012) to $2.81 (October 2014). The April 2014 high was $4.86.

Soybean meal: The May contract closed at $326.80, down $15.60 on the continuous monthly chart. The major (long-term) trend is down, with support pegged at the previous low of $302.00. The nearby futures spread remains inverted, though itself in a downtrend (weakening), reflecting a bullish commercial outlook.

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