Hogs
Price action: August lean hog futures rose $0.225 to $101.50, near mid-range and hit a two-month high.
Fundamental analysis: The lean hog futures market saw renewed mild buying from the chart-based speculators as a price uptrend remains in place on the daily bar chart. Bullish futures traders have been encouraged by recently rising cash hog prices. The USDA’s noon pork report today showed cutout value was up $2.00 at $105.10, led by gains in bellies, ribs and hams. Movement at midday was 105.10 loads. The latest CME lean hog index is up 51 cents to $96.16. Wednesday’s projected CME index price is up 48 cents at $96.64. The national direct five-day rolling average cash hog price quote for today was $99.80.
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 $105.00. The next downside price objective for the bears is closing prices below solid technical support at $96.325. First resistance is seen at $103.00 and then at $104.00. First support is seen at today’s low of $100.975 and then at $100.00.
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 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 $0.15 to $226.675, near mid-range. August feeder cattle lost $2.45 to $349.55, nearer the daily low.
Fundamental analysis: The live cattle futures markets today saw a pause after Monday’s short-covering gains. Feeders saw renewed technical selling pressure. Both markets remain in firmly bearish near-term technical postures. Fundamentally, the recent steep drop in the cash cattle market is also keeping cattle futures bulls very squeamish.
USDA at midday today reported no cash cattle trading taking place so far this week. The agency Monday reported average cash cattle trading last week at $238.28 down nearly $10 from the week-prior’s average of $248.01. The noon report today showed mixed boxed beef prices, with Choice grade down $1.02 at $369.08 and Select grade up $0.55 at $356.00. Movement at midday was decent at 89 loads. The Choice-Select spread is presently plus $13.08.
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 $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $222.275. First resistance is seen at today’s high of $227.75 and then at $230.50. First support is seen at this week’s low of $223.675 and then at $222.275.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $360.00. 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 $353.475 and then at $355.00. First support is seen at this week’s low of $345.05 and then at last week’s low of $343.60.
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.