Hogs
Price action: August lean hog futures rose $0.70 to $97.275, near the session high.
Fundamental analysis: The lean hog futures market today saw short covering and bargain hunting from the speculators. A price downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Prices are now in a fledgling uptrend on the daily bar chart.
The USDA noon pork showed cutout value was up $3.26 at $98.63, led by gains in bellies. Movement at midday was 143.30 loads. The latest CME lean hog index is down 23 cents to $91.55. Tuesday’s projected CME index price is down 14 cents at $91.41. The national direct five-day rolling average cash hog price quote for today is $97.47.
Technical analysis: Prices are now in a fledgling uptrend on the daily bar chart to suggest a market bottom is in place. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $100.00. The next downside price objective for the bears is closing prices below solid technical support at the November low of $93.675. First resistance is seen at last week’s high of $98.35 and then at $100.00. First support is seen at today’s low of $95.425 and then at the June low of $93.975.
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 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 fell $2.25 to $243.575, nearer the daily low. August feeder cattle lost $2.375 to $367.475, nearer the daily low.
Fundamental analysis: The cattle futures markets today saw profit-taking pressure from recent gains, along with some fresh technical selling.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 27 total New World screwworm detected cases in the U.S. and all still in Texas and New Mexico, with the newest two in Texas. There are 21 active cases, all in Texas. in the cross-border screwworm fight. Meantime, the U.S. and Mexico over the weekend inaugurated a sterile fly plant in Chiapas. The plant will eventually produce up to 100 million sterile flies a week, Reuters reported.
High heat and humidity across all of the Midwest this week will stress livestock.
USDA at midday today reported cash cattle trading prices last week averaged $259.34, down 29 cents from the week prior. The noon report today showed higher boxed beef prices, with Choice grade up $1.53 at $392.56 and Select grade up $4.71 at $376.29. Movement at midday was light at 32 loads. The Choice-Select spread is presently plus $16.27.
Technical analysis: Live and feeder cattle futures markets saw their price uptrends negated (live cattle) or put in serious jeopardy (feeders) today, which prompted some technical selling pressure. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $251.65. The next downside technical objective for the bears is closing prices below solid technical support at the June low of $233.975. First resistance is seen at today’s high of $245.60 and then at $247.50. First support is seen at $242.00 and then at $241.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $355.00. First resistance is seen at today’s high of $370.45 and then at $373.50. First support is seen at $365.00 and then at $362.00.
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.