Hogs
Price action: October lean hogs fell 5 cents to $97.325, nearer the daily low.
Fundamental analysis: The lean hog futures market saw some chart consolidation at mid-week, after hitting a contract high Tuesday. Gains in hog futures were again limited by a sell off in the cattle futures markets today. The near-term technical posture for October hogs remains firmly bullish, which is keeping sellers scarce at present.
The latest CME lean hog index is down 14 cents at $106.00. Thursday’s projected cash hog index is down another 14 cents at $105.86. Today’s national direct 5-day rolling average cash hog price quote is $105.99. The noon report today showed pork cutout value up 46 cents to $112.74, led by gains in ribs and loins. Movement at midday was 166.69 loads.
Technical analysis: October lean hog futures bulls have the firm overall near-term technical advantage. A choppy, two-month-old price uptrend remains in place on the daily bar chart. The next upside price objective for the hog bulls is to close October 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 $93.50. First resistance is seen at the contract high of $98.90 and then at $100.00. First support is seen at last Friday’s low of $96.725 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 September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: October live cattle fell $2.35 to $231.10, near mid-range. September feeder cattle lost $3.30 to $355.025, nearer the session low.
Fundamental analysis: The live and feeder cattle futures market bulls are fading fast this week as prices are now starting to trend down on the daily bar charts, amid deteriorating cash cattle and beef market fundamentals. Cattle market bulls are hoping Friday afternoon’s USDA monthly Cattle-on-Feed Report will be price-friendly and remind cattle traders of the still-tight feedlot cattle supplies.
Very light cash cattle trading has been reported by USDA so far this week, at an average of $240.00. Last week’s cash cattle trade averaged $239.33, down $3.22 from the previous week. The noon report today showed wholesale boxed beef cutout values solidly lower again, with Choice-grade down $4.89 to $387.73, while Select fell $4.28 to $368.99. Movement at midday was good at 98 loads. The Choice-Select spread is presently $18.84.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $236.00. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $228.80. First resistance is seen at today’s high of $233.075 and then at this week’s high of $234.75. First support is seen at today’s low of $229.60 and then at last week’s low of $228.80.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $362.00. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $349.725. First resistance is seen at today’s high of $358.225 and then at this week’s high of $359.75. First support is seen at today’s low of $353.00 and then at $351.00.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.