Commodity Charts Of The Day
An Ignored Commodity Sector: Livestock
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Before the 1% advance today, live cattle prices were 11% off their highs in 2012. In the August contract prices could be finding support around the $1.15 level for the third time in the last four months. Stay tuned...an interim bottom may be in the making.
Feeder cattle have fallen off a cliff, with prices declining 16% in the last five weeks. Prices have reached extremely oversold levels as cattle advanced the daily limit today, closing the gap from earlier in the week. Expect a bounce moving forward, but I'm not convinced the selling is done just yet. Although a trade back above $1.44, a 5% bounce from today's close, could play out.
After a 6% slide the last two weeks, lean hogs also find some buying support today, gaining the daily limit up 3.34%. Being prices have completed a 61.8% Fib retracement, I would say dips are a buy as long as 89 holds on a closing basis in the August contract.
Short-term, the entire livestock complex should trade higher, in my opinion.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.