Hogs
Price action: December lean hog futures rose $0.800 to $67.15, near the daily high.
Fundamental analysis: The lean hog futures market saw short covering in a bear market. Prices are not far above last week’s contract low. Charts remain bearish. A downtrend remains in place on the daily bar chart. Cash hog market and CME cash index prices continue to trend lower.
The latest CME lean hog index is down $0.79 at $73.40. Tuesday’s projected CME index price is down $0.38 at $73.02. The national direct five-day rolling average cash hog price quote for today is $68.23. The USDA noon pork report today showed cutout value was up $1.17 at $80.56, led by gains in bellies. Movement at midday was 149.46 loads.
Technical analysis: December lean hog futures see the technical posture as overall bearish amid a price downtrend in place on the daily chart. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $70.00. The next downside price objective for the bears is closing prices below solid technical support at $62.50. First resistance is seen at this week’s high of $67.70 and then at last week’s high of $69.00. First support is seen at the contract low of $65.80 and then at $65.00.
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 needs covered through the end of December, and are hand to mouth for soymeal for feed needs.Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle rose $2.15 to $230.175, near the daily high and hit a three-month high. November feeder cattle rose $2.375 to $346.30, near the daily high and hit a three-month high.
Fundamental analysis: The live and feeder cattle futures markets saw fresh technical buying today as prices are trending up on the daily chart. Solidly higher cash cattle trading last week also has boosted the futures bulls early this week. Longer-term supply and demand fundamentals remain bullish for the cattle and beef markets, too.
USDA Monday reported cash cattle trading last week averaged $224.19, up $4.05 from the week-prior average. So far this week, the agency has reported no cash cattle trading activity. The noon report today showed higher boxed beef prices, with Choice grade up $2.56 at $374.14 and Select grade up $1.77 at $361.68. Movement at midday was 59 loads. The Choice-Select spread is presently plus $12.46.
Technical analysis: December live cattle and November feeders bulls have the firm near-term technical advantage and are seeing prices trending up on their daily charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $222.50. First resistance is seen at $231.00 and then at $232.00. First support is seen at this week’s low of $227.225 and then at $226.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $350.00. The next downside price objective for the bears is to close prices below solid technical support at $333.00. First resistance is seen at $347.00 and then at $349.00. First support is seen at today’s low of $342.575 and then at this week’s low of $339.775.
What to do: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs.Be prepared to make purchases if value prices arise from fall harvest pressure.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs.Be prepared to make purchases if value prices arise from fall harvest pressure.