HighGround Dairy Technical Commentary – October 30, 2013

CME Class III Milk Futures Price convergence continues between the Nov and Dec Class III Milk contracts. In fact, the December Class III Milk contract registered another new high for the move and is approaching the mid-June highs of 18.21. This could offer the December contract a bit of a hurdle as near term momentum indicators have flattened out in overbought territory. It is also interesting to note that the November contract, while able to take out the June high 18.65, appears to be struggling with the March to April trading range. November Class III Milk has uptrend line support coming in tomorrow at 18.34, then the October 22 swing low of 18.12. Support for December Class III Milk comes in at its uptrend line of 17.67, then the October 22 swing low of 17.45. CME Cash Settled Butter November Butter appears to have found an equilibrium level in the 154.00 to 152.00 area, as it contemplates its next move. The market has been coiling inside that range for the last seven sessions and looks poised for a turn higher. The market has a defined area of resistance, and a further drive above 155.00 opens the charts up for challenge of the September 25 high (163.00). Given the turn up in slow stochastics from oversold levels, price confirmation above 155.00 would help leave the October low as near term bottom. Swing low support for November Butter stands at 150.275.