Hogs
Price action: December lean hogs fell 2 1/2 cents to $87.275, nearer the session high.
Fundamental analysis: The lean hog futures market paused today as bulls are working to stabilize prices after last week’s downdraft that produced near-term technical damage to suggest a market top is in place. Bulls are hoping lean hog futures’ discounts to the cash hog index will limit selling pressure. Cash and fresh pork fundamentals have been weakening. The latest CME lean hog index is down 86 cents at $102.84. Tuesday’s projected cash hog index is down another 82 cents at $102.02. Today’s national direct 5-day rolling average cash hog price quote is $100.72. The noon report today showed pork cutout value rebounded $1.40 to $109.70, led by gains in ribs and bellies. Movement at midday was 158.30 loads.
Technical analysis: December lean hog futures bears have the near-term technical advantage. A rare and bearish broadening pattern has formed on the daily bar chart, to also suggest a market top is in place. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $90.00. The next downside price objective for the bears is closing prices below solid technical support at $84.00. First resistance is seen at $88.00 and then at $89.00. First support is seen at last week’s low of $85.574 and then at $84.00.
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 December in the cash market. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: December live cattle rose $2.175 to $236.675, nearer the daily high. November feeder cattle rallied $5.375 to $360.80 and near the daily high. Both markets closed at two-week high closes.
Fundamental analysis: The live and feeder cattle futures markets bulls today showed they still have staying power, as they posted good gains for a second session in a row. However, the road gets tougher for the bulls on Tuesday as solid technical resistance levels now lie just above present prices.
USDA today reported cash cattle trading last week averaged $230.76. That’s down $1.89 from the prior week’s USDA reported average of $232.65. The noon report today showed wholesale boxed beef cutout values firmer, with Choice-grade up 66 cents to $362.93, while Select rose $1.95 to $347.33. Movement at midday was 61 loads. The Choice-Select spread is presently $15.60.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage. However, there are very strong chart resistance levels that lie just above present prices. The next upside price objective for the live cattle bulls is to close December futures above resistance at $241.35. The next downside technical objective for the bears is closing prices below solid technical support at the September low of $230.075. First resistance is seen at today’s high of $237.15 and then at $238.00. First support is seen at today’s low of $233.75 and then at last week’s low of $231.75.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $363.775. The next downside price objective for the bears is to close prices below solid technical support at $349.125. First resistance is seen at today’s high of $361.70 and then at $362.775. First support is seen at $357.50 and then at today’s low of $355.15.
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 December. For corn, you have all needs through October covered in the cash market. Be prepared to make additional purchases if value prices continue.