HighGround Dairy Technical Commentary – November 15, 2013

CME Class III Milk Futures  The January – June ‘14 Class III Milk pack showed some weakness in recent sessions, with a failure to return back toward this week’s high followed by a new five day low close. It is also interesting to note that Thursday’s new high settled right on a 61.8% retracement level of the April-August breakdown (16.97). Recent attacks at 17.00 have lacked follow through and have come with quick pullbacks back into congestion. While the trend for the six-month Class III Milk pack points up, it is showing signs of fatigue and susceptible to a deeper downside more over the near term. This is highlighted with the bearish momentum divergence in slow stochastics (lower indicator peaks while prices establish higher peaks). A close below 16.85 would turn the tide in favor of the bear camp, with an initial retracement target at 16.70.