Hogs
Price action: October lean hog futures rose $0.075 to $83.15, near mid-range.
Fundamental analysis: The lean hog futures market paused today. There are still near-term technical clues that lean hog futures have put in a price bottom.
The latest CME lean hog index is down 86 cents to $88.79. Friday’s projected CME index price is down another 57 cents at $88.22. The national direct five-day rolling average cash hog price quote for today is $87.72. The USDA’s noon pork report today showed cutout value was down $2.20 at $91.43, led by a $14 loss in bellies. Movement at midday was 178.31 loads.
Technical analysis: October lean hog futures see recent chart action that suggests a near-term market bottom is in place. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at the August low of $79.675. First resistance is seen at last week’s high of $84.90 and then at $86.00. First support is seen at $82.00 and then at $81.00.
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 September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle rose $1.975 to $217.825, near the daily high and hit a three-week high. November feeder cattle rose $1.425 to $322.775, nearer the daily high and hit a four-week high.
Fundamental analysis: The live cattle futures market today saw some fresh chart-based buying, some short covering and some perceived bargain hunting. October live cattle futures continue to trade at what is now a slight discount to the cash cattle market, which is also mildly supportive for futures.
USDA at midday today reported very light cash cattle trading so far this week, at $218.00. Last week’s cash trade averaged $219.06. The agency said cash cattle trade the week prior averaged $219.25. The noon report today showed weaker boxed beef prices, with Choice grade down $2.97 at $377.80 and Select grade down $0.69 at $351.65. Movement at midday was good at 83 loads. The Choice-Select spread is presently plus $26.15.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $222.50. The next downside technical objective for the bears is closing prices below solid technical support at the August low of $209.525. First resistance is seen at today’s high of $218.00 and then at $219.00. First support is seen at $215.00 and then at this week’s low of $213.175.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $333.50. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at today’s high of $323.875 and then at $325.00. First support is seen at $318.00 and then at this week’s low of $314.675.
What to do: You have corn-for-feed and soymeal needs covered through September 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 September in the cash market. Be prepared to make purchases if value prices continue.