Hog and cattle futures have taken “serious” technical damage from recent sell-offs, signaling price highs set earlier this spring may stick for the time being, chart analyst Jim Wyckoff said.

After rallying much of this year, cattle and hog futures have both tumbled more than 7 percent from contract highs reached during the past month.

June lean hogs today fell 0.725 cents to 81.15 cents a pound, after declining as low as 80.65 cents. On May 21, the contract fell as low as 79.4 cents, the lowest price since 77.8 cents on March 26. June reached a contract high of 87.8 cents April 22.

The June hog contract is potentially forming a bearish “flag” pattern on daily price charts, Wyckoff said. A settlement below last week’s low would confirm that pattern, which would be a “significantly” bearish development possibly signaling a “downside breakout” to 75 cents, he said.

Last week’s closing low “is really an important point” for hog futures, Wyckoff said.

The recent slide in cattle is steep enough to “suggest a market top is in place,” said Wyckoff, president of JimWyckoff.com, a market analysis Web site.

“The bears have the overall near-term technical advantage” in cattle, Wyckoff said in an e-mail. In hogs, “bears have the slight near-term technical advantage,” he said.

In today’s trading, June live cattle in Chicago fell 1.1 cents to 90.025 cents a pound, after dipping to 89.325 cents, the lowest price since 88.6 cents on Feb. 16. June cattle hit a contract high of 97.2 cents May 5.

For cattle market bears, the next downside price objective is 88 cents a pound, said the Cedar Falls, Ia.-based Wyckoff, who bases his projections on trend lines, historical highs and lows and other technical systems. The June contract hasn’t traded below 88 cents since Feb. 8.

Heavy selling in livestock futures is tied to the stock market slump, with the Dow Jones Industrial Average sinking below 10,000 today for the first time since February amid concern over Europe’s financial crisis. Stock market weakness often spills over into commodity futures, triggering speculator selling.

Europe’s turmoil is troubling for bullish commodity traders and livestock producers, raising the prospect of a “double-dip” recession in the U.S., Wyckoff said.

“With what’s going on in Europe, there really is the specter of commodity price deflation,” Wyckoff said. “You’ve seen a lot of speculative money sucked out of the market.”

Crude oil prices, a harbinger for commodities generally, have also plunged this month, Wyckoff noted.  Oil is “probably going to continue to be the leader” among commodities, he said.

Earlier today, crude futures fell as low as $67.15 a barrel, down 24 percent since the end of April and a low for 2010.

Declines in cattle and hog prices may be limited because animal supplies have shrunk following herd reductions over the previous two years, analysts said.

Cattle prices “could snap back over the near-term,” Doane Advisory Services analysts said in a May 21 report.  In hogs, “the underlying market fundamentals for hogs are still strong, but there is a good chance that we have seen the highs for futures prices for awhile” Doane said.