Hogs
Price action: Lean hog futures rose 85 cents to $85.35, near the session high and hit a two-month high.
Fundamental analysis: Lean hog futures today saw technical buying from the speculative traders. Recently rising cash hog prices and a bullish near-term chart posture for the futures market will likely continue to support buying interest in lean hog futures. The February futures contract is above the latest CME lean hog index, which is also a positive.
The latest CME lean hog index is down 15 cents to $83.73. Tuesday’s projected cash index price is down 2 cents at $83.71. Today’s national direct 5-day rolling average cash hog price quote is $69.67. The noon report today showed pork cutout value down 74 cents at $99.02, led by losses in hams. Movement at midday was 148.63 loads.
Hog traders are awaiting the quarterly USDA hogs and pigs report Tuesday afternoon, which is expected to show a decline in inventories and kept for breeding numbers.
Technical analysis: February lean hog futures bulls have the overall near-term technical advantage. Prices are trending up on the daily chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at $88.00. The next downside price objective for the bears is closing prices below solid technical support at $82.00. First resistance is seen at today’s high of $85.35 and then at $86.00. First support is seen at $84.00 and then at $83.00.
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 February in the cash market. You should also have corn-for-feed needs purchased through February. Be prepared to make additional purchases.
Cattle
Price action: February live cattle rose 62 1/2 cents to $231.425, near mid-range and hit a two-month high. January feeder cattle rose 90 cents to $346.50, nearer the daily low and hit a two-month high early on.
Fundamental analysis: The live and feeder cattle futures markets today saw more chart-based buying from the technically oriented speculators as the charts remain bullish. A bullish USDA cattle on feed report also helped push futures prices higher today.
USDA on Friday afternoon released its December cattle-on-feed report, which showed cattle and calves on feed for the slaughter market in the U.S. for feedlots with capacity of 1,000 or more head totaled 11.7 million head on December 1. The inventory was 2 percent below December 1, 2024. Placements in feedlots during November totaled 1.60 million head, 11 percent below 2024. Net placements were 1.54 million head. Placements were the lowest for November since the series began in 1996. Marketings of fed cattle during November totaled 1.52 million head, 12 percent below 2024. Marketings were the second lowest for November since the series began in 1996.
USDA today reported cash cattle trading last week averaged $227.97, which is down 22 cents from the prior week’s average. The noon report today showed wholesale boxed beef cutout values higher with Choice-grade up $1.10 at $362.73, while Select-grade gained $6.02 to $352.04. Movement at midday was light at 37 loads. The Choice-Select spread is $10.69.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage. Price uptrends are in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $225.00. First resistance is seen at today’s high of $232.325 and then at $234.00. First support is seen at $230.00 and then at $228.50.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $356.875, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $337.00. First resistance is seen at today’s high of $348.85 and then at $350.00. First support is seen at $345.00 and then at $342.50.
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 February. You have corn-for-feed needs covered through February as well. Be prepared to make additional purchases if value prices continue.