Market participants would most likely agree that the market trades with the most confidence when supported by both its fundamental and technical indicators. During the last two weeks, the market has seen that play out perfectly as traders have mildly supported both live cattle and feeder cattle contracts, the fed cash cattle market has traded higher, and boxed beef demand has been mixed.

But, moving into this new week, that fundamental support is going to be even more important.

You see, hovering closely over both the live cattle and feeder cattle contracts are the market's 40-day moving averages, which the contract fell below early in July when seasonal pressure was building.

For traders to confidently push the contracts over that threshold, they're going to need to see enough fundamental reassurance that this will be a sound move for the market.

Last week, it was impressive to see Northern dressed cattle trade at mostly $370, which was $3 higher than the previous week's weighted average; Southern live cattle traded at mostly $235, which is $2 higher than the previous week's weighted average. Adding to that fundamental success, both choice and select boxed beef prices traded higher throughout most of the week.

Choice cuts last week averaged $366.51, which is $3.70 higher than the previous week's weighted average; select cuts averaged $348.23, which is $4.50 higher than the previous week's weighted average.

But as the market enters this new week, traders are going to closely evaluate the marketplace to see what support either surfaces or doesn't -- because pushing the contracts back above their 40-day moving average would signal bullish momentum. If the market is going to make that kind of move, it's going to need undeniable support.

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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