Since the spring of 2020, both live and feeder cattle have been in solid uptrends. Within the last couple of weeks, they both have reached significant weekly upside price targets.
I am not saying the rally is over because I don't know for sure, but live cattle has rallied over 100% in this 3 year timeframe and the feeder cattle has almost doubled in price.
What I am saying, is that these higher prices in the cattle markets are offering low risk hedging opportunities. The current up move in live cattle has fallen just 2 dollars short of the 2014 high of 171.65, effectively making this a double top on the weekly chart.
Also, both of these markets have reached important supply/demand upside targets. What this means is that they have reached a balance point on the charts. At the beginning of the rally in the spring of 2020, the supply/demand ratio was too large - there was a supply glut.
By accomplishing these huge up moves, live and feeder cattle have run through a good amount of supply and curbed demand some. It is a balancing act and makes the charts more symmetrical. All markets that become oversold and then have to become overbought to balance things out.
There are 2 supply/demand lines on the live cattle chart. The first one was achieved in February of last year the second line was achieved within the last couple of weeks.
And, as mentioned above, live cattle has also made very close to a double top with the 2014 highs. Spend some time checking these charts out and I believe you will see the opportunity. The live cattle weekly chart is first.
The feeder cattle weekly chart has achieved an additional math target. The base is about 53 dollars wide and if you add 53 to the top of the base (roughly 155), this equals 208 which is less than five dollars above the high (close).
When a chart gives you more than one signal all pointing in the same direction, this gives added confidence and higher odds that what you think you are seeing is correct.
May Wheat made a strong bullish statement on Friday by closing higher than the last 6 day's closes. This is a key reversal higher, signaling that the bulls have gained the upper hand and that a rally has a high probability of starting now.
We know now that the right shoulder of the inverted head & shoulders is marked in place and a rally should be starting - again, more than one signal. Resistance is 693 then 724 and support is 673. Check out the updated daily May Wheat chart.
Support for May Soybeans is between 1490 and 1479. Resistance is 1535.
Support for May Corn is between 661.75 and 655 and resistance or next target higher is 683.