Hogs
Price action: June lean hog futures fell $0.65 to $107.05, nearer the session low.
Fundamental analysis: The lean hog futures market saw mild profit-taking pressure from the shorter-term futures traders following Monday’s solid gains. An uptick in trader/investor risk aversion today also limited buying interest in hog futures. Still, the bulls have some momentum on their side after Monday’s good price gains.
The latest CME lean hog index is down 8 cents at $89.93. Wednesday’s projected cash index price is up 13 cents at $90.06. The national direct five-day rolling average cash hog price quote today is $68.75. The noon report today showed pork cutout value up $0.51 at $99.55, led by gains in hams and bellies. Movement at midday was decent at 165.82 loads.
Technical analysis: April lean hog futures bulls and bears are on a level overall near-term technical playing field but the bulls have some momentum. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $102.95. First resistance is seen at this week’s high of $107.85 and then at $109.00. First support is seen at $106.00 and then at $105.00.
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 April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $1.225 to $245.80, nearer the daily low. May feeder cattle lost $3.725 to $366.625, nearer the daily low.
Fundamental analysis: The cattle futures markets today saw routine profit-taking pressure and needed downside price corrections following recent gains that pushed June live cattle to a contract high and May feeders to a 5.5-month high on Monday. A downtick in trader/investor risk appetite in the general marketplace today also limited buying interest in cattle futures. Still, cash cattle and beef market fundamentals remain solid.
USDA at midday today reported no cash cattle trading yet this week. The agency on Monday reported cash cattle trading last week averaged $244.96. That’s $9.27 higher than the week-prior’s average of $235.69. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down $1.87 at $386.17, while Select-grade was up $0.26 at $388.63. Movement at midday was decent at 73 loads. The Choice-Select spread at midday today was minus $2.46.
Technical analysis: Cattle futures markets bulls are enjoying solid price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at $250.00. The next downside technical objective for the bears is closing prices below solid technical support at $239.00. First resistance is seen at the contract high of $248.45 and then at $250.00. First support is seen at $244.00 and then at $242.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $376.625. The next downside price objective for the bears is to close prices below solid technical support at $355.00. First resistance is seen at $370.00 and then at this week’s high of $372.625. First support is seen at $365.00 and then at $362.50.
What to do: Cover corn-for-feed needs through April 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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.