Hogs
Price action: April lean hog futures rose $1.25 to $96.075, near mid-range.
Fundamental analysis: Lean hog futures today saw a corrective bounce from Monday’s price pressure. Higher cattle futures prices today also spilled over into some buying interest in hog futures. Better risk appetite in the general marketplace today, amid a big drop in crude oil prices, also helped to lift hog futures.
The latest CME lean hog index is up 13 cents at $90.87. Wednesday’s projected cash index price is up another 10 cents at $90.97. The national direct five-day rolling average cash hog price quote today is $67.61. The noon report today showed pork cutout value down $1.78 at $99.54, led by losses in loins. Movement at midday was decent at 184.70 loads.
Technical analysis: April lean hog futures bulls have the overall near-term technical advantage. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at last week’s high of $97.30. The next downside price objective for the bears is closing prices below solid technical support at the February low of $91.125. First resistance is seen at today’s high of $96.625 and then at $97.30. First support is seen at $95.00 and then at this week’s low of $94.10.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal needs covered through March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $2.225 to $232.375, nearer the daily high. March feeder cattle gained $2.70 to $353.35, near mid-range.
Fundamental analysis: The cattle futures markets today saw corrective rebounds from big losses scored the previous two trading sessions. Improved risk appetite in the general marketplace amid falling crude oil prices also helped to spur some buying interest in cattle futures. Gains were limited by lower cash cattle trading prices last week and worries about a JBS labor strike at a Greeley, Co. packing plant. USDA Monday reported last week’s average cash cattle trade at $239.94, which is down $2.77 from the week prior. The noon report today showed wholesale boxed beef cutout values solidly up. Choice-grade was up $6.33 at $397.62, while Select-grade rose $3.78 to $387.40. Movement at midday was light at 44 loads. The Choice-Select spread at midday today was plus $10.22.
Technical analysis: Recent strong selling pressure in cattle futures produced chart damage to suggest at least near-term market tops are in place. The next upside price objective for the live cattle bulls is to close April futures above resistance at $239.95. The next downside technical objective for the bears is closing prices below solid technical support at $220.00. First resistance is seen at $233.675 and then at $235.00. First support is seen at $230.00 and then at this week’s low of $227.325.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $364.825. The next downside price objective for the bears is to close prices below solid technical support at $340.00. First resistance is seen at today’s high of $355.45 and then at $358.00. First support is seen at $350.00 and then at this week’s low of $346.375.
What to do: Cover corn-for-feed needs through March in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.