US Class III Milk Technical Commentary – August 21, 2013
CME Class III Milk Futures September Class III Milk finished Wednesday’s session with a three day losing streak and a peak to trough decline of nearly 7%. While the near term trend in the market favors the bear camp, severely oversold technical conditions warrant caution, especially as the market challenges the July 2012 gap zone of US$17.09 down to $16.75. It is also worth pointing out the extreme net short speculator positioning as another factor favoring a corrective rebound. There is a similar pattern for the October contract: downtrend pattern reaching extremely oversold territory. The next area of support comes in at the July 2012 gap zone of $16.88 down to $16.38. The weekly chart of the second-contract month also highlights support coming in at $16.67, then $16.55. While there appears more downside left in the market, corrective rallies back toward downtrend line resistance (18.10) are possible.