Technically Speaking

Weekly Analysis: Livestock Markets

Live Cattle: The August contract closed $0.225 higher at $150.80. Despite the slightly higher weekly close the secondary (intermediate-term) trend remains down. Resistance near $152.25, a price that marks the 67% retracement level of the previous downtrend from $159.40 through the low of $137.975, continues to hold. Weekly stochastics are bearish following a crossover above the overbought level of 80% the week of June 1. Initial support is at the 4-week low of $149.375.

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Feeder Cattle: The August contract closed $1.55 higher at $223.45 last week. Despite the higher weekly close the secondary (intermediate-term) trend looks to be down. Resistance near $224.35, a price that marks the 67% retracement level of the previous downtrend from $237.95 through the low of $196.675, continues to hold the weekly close. Last Friday's close saw weekly stochastics establish a bearish crossover above the overbought level of 80%.

Lean hogs: The August contract closed $4.10 lower at $76.725 last week. The market extended its recent sell-off, establishing a new 4-week low of $76.575 before closing near that low. With weekly stochastics neutral-to-bearish the contract could look at testing next support at its low of $73.55 (week of March 23).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.34, down 8 cents for the week. Cash corn looks to have quickly moved back into a sideways trend after testing initial resistance at $3.47. This price marks the 33% retracement level of the previous downtrend from $3.80 through the recent low of $3.31. Support remains at the $3.31 low. Weekly stochastics are now neutral below the oversold level of 20%.

Soybean meal: The July contract closed $12.50 higher at $317.40. July soybean meal posted a strong rally last week, easily eclipsing its previous 4-week high of $315.00 and confirming the previous week's double-bottom formation near $294.40. Combined with a bullish crossover by weekly stochastics below the oversold level of 20% the week of June 1, the secondary (intermediate-term) trend now looks to be up with an initial target of $332.70. This price marks the 33% retracement level of the previous downtrend from $409.30 through $294.40 low (week of September 29, 2014).

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