Technically Speaking

Live Cattle: The June contract closed $0.40 lower at $152.125 last week. While the secondary (intermediate-term) trend remains up, weekly stochastics are nearing a bearish crossover above the overbought level of 80%. If established this would confirm the recent double-top formation near $154.825, a price that marks the 67% retracement level of the previous downtrend from $162.925 through the low of $138.60.

Feeder Cattle: The August contract closed $0.60 higher at $219.00 last week. The contract is testing resistance between $217.30 and $222.20, prices that mark the 50% and 61.8% retracement levels respectively of the initial sell-off from $237.95 through the low of $196.675. This is also a test of the previous high of $221.45 from the week of April 6 when the contract posted a bearish reversal. Weekly stochastics are above the overbought level of 80% setting up a potential bearish crossover.

Lean hogs: The June contract closed $0.375 higher at $83.725 last week. The secondary (intermediate-term) trend remains up with resistance at $85.85, the 50% retracement level of the previous secondary downtrend from $99.65 through the low of $72.05. Weekly stochastics are bullish but nearing the overbought level of 80%.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.42, down 5 cents for the week. The secondary (intermediate-term) trend is sideways-to-down with the NCI.X closing at initial support of $3.42. This price marks the 38.2% retracement level of the previous uptrend from $2.81 through the high of $3.80. Weekly stochastics show cash corn to be oversold, setting the stage for a potential bullish crossover in the coming weeks.

Soybean meal: The July contract closed $0.90 higher at $304.20 last week. Though the market remains in a secondary (intermediate-term) downtrend, the July contract continues to hold above its low of $294.40. With weekly stochastics showing a sharply oversold situation, the market is in position to establish a possible double-bottom leading to secondary sideways-to-up trend. Support continues to come from bullish fundamentals, as indicated by the strengthening inverse of the market's forward curve. Pressure is coming from continued noncommercial selling, with Friday's CFTC Commitments of Traders report showing this group liquidating another 1,760 contracts of their net-long futures position.

The weekly Commitments of Traders report showed positions held as of Tuesday, May 19.

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