Technically Speaking

Live Cattle: The August contract closed $0.575 higher at $151.275 last week. While the secondary (intermediate-term) trend remains up, weekly stochastics are above the overbought level of 80% indicating buying interest could soon fade. Friday's CFTC Commitments of Traders report would seem to confirm that idea, with noncommercial interests reducing their net-long futures position by 1,167 contracts. Also, though August cattle pushed above resistance near $152.275, the 67% retracement level of the previous downtrend from $159.40 through the low of $137.975, last week it was unable to close above this level. This could spark renewed selling interest in the weeks ahead, moving the market to a secondary (intermediate-term) downtrend.

Feeder Cattle: The August contract closed $3.95 higher at $222.95 last week. The contract continues to test resistance near $224.325, a price that marks the 67% retracement level of the previous downtrend from $237.95 through the low of $196.675. Weekly stochastics have climbed above the overbought level of 80%, setting the stage for a potential bearish crossover in the weeks ahead, signaling a possible move to a secondary (intermediate-term) downtrend.

Lean hogs: The August contract closed $1.225 lower at $82.500 last week. With weekly stochastics above the overbought 80% level the secondary (intermediate-term) trend could be turning sideways. Resistance remains near $84.45, a price that marks the 50% retracement level of the previous downtrend from $95.35 through the low of $73.55. Support is near $81.675, the 33% retracement level of the recent rally from the $73.55 low through the $85.05 high, then the 50% retracement level near $79.975.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.33, down 9 cents for the week. The secondary (intermediate-term) trend remains down with the NCI.X testing support of $3.31. This price marks the 50% retracement level of the previous uptrend from $2.81 through the high of $3.80. Weekly stochastics are in single digits, indicating a sharply oversold market and setting the stage for a potential bullish crossover in the coming weeks.

Soybean meal: The July contract closed $1.50 higher at $305.70 last week, posting a possible bullish reversal on its weekly chart. Weekly stochastics did not confirm this bullish signal, but are in single digits and nearing a bullish crossover well below the oversold level of 20%. Support continues to come from commercial buying, as indicated by the strengthening inverse in the market's forward curve. While Friday's CFTC Commitments of Traders report showed noncommercial interests continuing to reduce their net-long futures holdings, chart indications are that this group could start buying again, turning the secondary (intermediate-term) trend up.

The weekly Commitments of Traders report showed positions held as of Tuesday, May 26.

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