HighGround Dairy Technical Commentary – August 26, 2013

CME Class III Milk Futures October Class III Milk finished Monday’s session on a strong note and up more than 5% from Thursday’s swing low (17.27). The short term edge goes to the bull camp, with a number of resistance points just ahead. Also of note is that the sharp advance in recent sessions has helped rebalance the market and relieve extremely oversold technical conditions. The October contract faces a pivot level at 18.25, August 19th swing high of 18.34, then the August 9th high of 18.57. We would expect the current advance to stall around these resistance levels. A close in the October contract above 18.40 would go a step further in turning the intermediate trend in favor of the bull camp. With the primary trend in the market still pointing down, there is still a good chance for a retest of last week’s low (17.27) and potential run at the July 2012 gap zone of 16.88 down to 16.38.