Hogs
Price action: October lean hog futures fell $1.175 to $83.075, near mid-range.
Fundamental analysis: The lean hog futures market saw a corrective pullback and profit taking following Tuesday’s good gains. There are still near-term technical clues that lean hog futures have put in a price bottom.
The latest CME lean hog index is down 89 cents to $89.65. Thursday’s projected CME index price is down another 86 cents at $88.79. The national direct five-day rolling average cash hog price quote for today is $87.57. The USDA’s noon pork report today showed cutout value was up $2.28 at $94.10, led by a $14 gain in bellies. Movement at midday was good at 223.10 loads.
Technical analysis: October lean hog futures see recent chart action that suggests a near-term market bottom is in place. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at the August low of $79.675. First resistance is seen at last week’s high of $84.90 and then at $86.00. First support is seen at $82.00 and then at $81.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $1.175 to $215.85, near mid-range and hit a two-week high early on. November feeder cattle rose $0.90 to $321.35, nearer the daily high and hit a three-week high.
Fundamental analysis: The live cattle futures market today saw a corrective pullback from Tuesday’s solid gains, while feeder futures saw a pause and some chart consolidation. October live cattle futures continue to trade at a discount to the cash cattle market, which is also supportive for futures.
USDA at midday today reported no cash cattle trading so far this week. Last week’s cash trade averaged $219.06. The agency said cash cattle trade the week prior averaged $219.25. The noon report today showed mixed boxed beef prices, with Choice grade up $4.61 at $382.18 and Select grade down $0.34 at $355.05. Movement at midday was good at 84 loads. The Choice-Select spread is presently plus $27.13.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $222.50. The next downside technical objective for the bears is closing prices below solid technical support at the August low of $209.525. First resistance is seen at today’s high of $217.475 and then at $219.00. First support is seen at this week’s low of $213.175 and then at $212.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $333.50. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at today’s high of $320.85 and then at $323.00. First support is seen at this week’s low of $314.675 and then at $311.625.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.