Hogs
Price action: August lean hog futures rose $0.125 to $103.10, near mid-range and hit a ten-week high.
Fundamental analysis: The lean hog futures market saw mild technical buying today, with good gains in the cattle futures markets also spilling over into some buying interest in hogs. A price uptrend remains in place on the daily bar chart, which continues to invite the chart-based specs to the long side. Lean hog futures bulls continue to be encouraged by rising cash hog prices. The latest CME lean hog index is up 32 cents to $98.23. Wednesday’s projected CME index price is up another 12 cents at $98.35. The national direct five-day rolling average cash hog price quote for today is $100.99. The USDA’s noon pork report today showed cutout value was up $1.30 at $105.75, led by gains in bellies. Movement at midday was 112.82 loads.
Technical analysis: August lean hog futures see a price uptrend firmly in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $106.00. The next downside price objective for the bears is closing prices below solid technical support at $98.00. First resistance is seen at $104.00 and then at $105.00. First support is seen at this week’s low of $102.10 and then at $101.00.
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 July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle rose $2.25 to $227.475, near mid-range and closed at a two-week high close. August feeder cattle gained $4.825 to $343.075, near mid-range.
Fundamental analysis: The cattle futures markets today saw decent rebounds from Monday’s selling pressure that was due in part to news USDA announced a coordinated, phased reopening of southern cattle ports. That news did not blindside traders, who had been reckoning a reopening of the border was coming at some point. More steep losses in crude oil futures prices today also worked in the favor of the cattle market bulls, as consumer demand for beef would be better if gasoline prices at the pump were lower. Livestock stress continues high in the Plains states and will stay high because of oppressive heat. Livestock weight gains have likely suffered in the high heat.
USDA at midday today reported very light cash cattle trade taking place this week, with steers averaging $229.00 and heifers $228.00. The agency Monday reported cash cattle trading last week averaged $230.48, which is down $7.80 from the week prior’s reported average cash cattle trade at $238.28. The noon report today showed higher boxed beef prices, with Choice grade up $2.91 at $365.80 and Select grade down $0.76 at $345.92. Movement at midday was decent at 76 loads. The Choice-Select spread is presently plus $19.88.
Technical analysis: Live and feeder cattle futures markets still see price downtrends in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at $233.00. The next downside technical objective for the bears is closing prices below solid technical support at $220.00. First resistance is seen at last week’s high of $228.50 and then at $230.00. First support is seen at $225.00 and then at this week’s low of $222.75.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $353.475. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $346.00 and then at $348.95. First support is seen at $340.00 and then at this week’s low of $337.00.
What to do: You have corn-for-feed and soymeal needs covered through July 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 July in the cash market. Be prepared to make purchases if value prices continue.