Hogs
Price action: April lean hog futures rose 55 cents to $96.725, near mid-range and hit a contract high.
Fundamental analysis: Lean hog futures today saw more technical buying and firming cash hog and lean hog index prices. The latest CME lean hog index is up 55 cents at $83.62. Tuesday’s projected cash index price is up another 39 cents at $84.01. The national direct five-day rolling average cash hog price quote today is $60.71. The noon report today showed pork cutout value up $1.62 at $97.37, led by gains in ribs. Movement at midday was 120.78 loads.
Technical analysis: April lean hog futures bulls have the solid overall near-term technical advantage. Prices are trending higher on the daily bar chart. The next upside price objective for the hog bulls is to close April 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 $92.50. First resistance is seen at today’s contract high of $97.375 and then at $98.00. First support is seen at today’s low of $95.725 and then at $95.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production 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 February. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $1.075 to $238.00, nearer the daily high. March feeder cattle gained $2.425 to $362.60, nearer the session high.
Fundamental analysis: The live and feeder cattle futures markets today got support from Friday afternoon’s monthly USDA Cattle-on-Feed Report that leaned overall price-friendly, and from solidly higher cash cattle prices fetched in trading last week. Serious livestock stress has occurred in the central and southern U.S. Plains, Midwest, Delta, Tennessee River Basin and surrounding areas during the weekend due to extreme cold, snow, freezing rain and strong wind chills, said World Weather.
USDA today reported average cash cattle trading last week at $234.70, up $2.20 from last week’s cash cattle traded average of $232.50. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up 33 cents at $369.25, while Select-grade rose $3.58 to $365.97. Movement at midday was light at 50 loads. The Choice-Select spread at midday today was plus $3.28.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage but price uptrends have at least temporarily stalled out. The next upside price objective for the live cattle bulls is to close April futures above resistance at $240.00. The next downside technical objective for the bears is closing prices below solid technical support at the January low of $231.275. First resistance is seen at the January high of $239.05 and then at $240.00. First support is seen at $235.00 and then at last week’s low of $232.65.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at the January high of $365.00 and then at $367.50. First support is seen at $360.00 and then at $357.50.
What to do: Cover corn-for-feed needs through February 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 February as well. Be prepared to make additional purchases if value prices continue.