HighGround Dairy Technical Commentary – September 23, 2013

CME Class III Milk Futures November Class III Milk saw further upside follow through early in Monday’s session but once again struggled with resistance at 17.80. The bearish outside day reversal on the session suggests another near term pullback is in order before another attack at resistance. In the meantime, each break from resistance is becoming shallower as the market continues to coil inside of a tighter and tighter range. November Class III Milk has near term swing low support at last Tuesday’s low of 17.40. The near term trend supports the bulls with a nearby objective at 17.98. A push back through 18.00 to 18.10 basis the November contract would reinstate the bull trend and leave the 17.11 to 17.80 congestion zone as a larger base and project further advances toward 19.00. The deferred contracts held up considerably better during Monday’s weakness, with the January 2014 contract showing a bullish outside day reversal on the session. The market has a defined level of resistance at 16.75, and a drive above this level would favor a larger advance targeting 17.50. A move back down below 16.30 would re-assert the bear trend.