Hogs
Price action: August lean hog futures fell $1.45 to $94.70, nearer the daily low and hit a nearly seven-month low today.
Fundamental analysis: The lean hog futures market saw still more technical selling pressure today. Near-term charts remain firmly bearish as a price downtrend is in place on the daily bar chart. This means the path of least resistance for futures prices remains sideways to lower in the near term.
The latest CME lean hog index is up 3 cents at $92.63. Wednesday’s projected cash index price is up another 13 cents at $92.76. The national direct five-day rolling average cash hog price quote today is $95.80. The noon report today showed pork cutout value down $0.67 at $97.79, led by losses in butts and loins. Movement at midday was 148.55 loads.
Technical analysis: August lean hog futures bears have the solid overall near-term technical advantage and gained more power today. Prices are in a steep downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close June 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 today’s high of $96.55 and then at $98.00. First support is seen at$93.675 and then at $92.00.
What to do: Get current with feed coverage.
Hedgers: Futures are trending lower on the daily chart and the downside is overdone. Hold 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 $2.975 to $239.70, near the daily high. August feeder cattle gained $3.45 to $354.15, near the daily high.
Fundamental analysis: The cattle futures markets saw corrective rebounds from Monday’s losses. The potential ramifications of New World screwworm on the U.S. cattle industry, following five cases being found in Texas and now in New Mexico may keep futures markets range-bound for the near term. USDA has now confirmed five cases of new world screwworm in the U.S., three calves and a goat in Texas, and one dog in New Mexico.
USDA at midday today reported very light cash cattle trading early this week, averaging $253.39. The agency on Monday reported last week’s average cash cattle trading price was $256.53 — down 33 cents from the week prior. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down $0.34 at $391.86, while Select-grade gained $0.41 to $378.50. Movement at midday was decent at 75 loads. The Choice-Select spread at midday today was plus $13.36.
Technical analysis: Live and feeder cattle futures 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 the contract high of $251.65. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $233.975. First resistance is seen at $241.00 and then at this week’s high of $243.25. First support is seen at $237.00 and then at today’s low of $235.15.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $363.00. 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 $356.00 and then at last week’s high of $358.75. First support is seen at $350.00 and then at $348.00.
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.