Hogs
Price action: April lean hog futures rose $0.25 to $91.05, near the session high and hit a nine-week low early on.
Fundamental analysis: The lean hog futures market saw mild short covering, following recent technical selling pressure that has produced near-term chart damage. The rally in the cash hog market has also stalled out and cash prices are starting to slip. The latest CME lean hog index is down 17 cents at $91.78. Wednesday’s projected cash index price is down another 7 cents at $91.70. The national direct five-day rolling average cash hog price quote today is $69.09. The noon report today showed pork cutout value up $0.83 at $100.43, led by gains in bellies. Movement at midday was 171.77 loads.
Technical analysis: April lean hog futures bears have the near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at $94.00. The next downside price objective for the bears is closing prices below solid technical support at $90.00. First resistance is seen at $92.00 and then at $93.00. First support is seen at $90.00 and then at $89.00.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal needs covered through March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $0.075 to $235.375, near mid-range and hit a three-week high early on. May feeder cattle gained $2.35 to $350.70, nearer the daily high and hit a three-week high.
Fundamental analysis: The cattle futures markets today saw some fresh technical buying interest as the bulls have restarted price uptrends on the daily bar charts. Higher cash cattle prices fetched this week in very light trading also supported futures today. USDA today at midday reported very light cash cattle trading at $236.00. The agency on Monday reported cash trading last week averaged $235.08—up $0.25 from the week prior average of $234.83. The noon report today showed wholesale boxed beef cutout values higher again, with Choice back above $400.00. Choice-grade was up $1.07 at $400.20, while Select-grade was up $2.47 at $396.30. Movement at midday was 53 loads. The Choice-Select spread at midday today was plus $3.90.
In the Plains states, the extreme heat seen over the weekend and more expected later this week was and will be stressful to livestock in the region.
Technical analysis: Cattle futures markets bulls have restarted price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above resistance at $239.95. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $227.325. First resistance is seen at $237.00 and then at $238.00. First support is seen at this week’s low of $233.35 and then at $232.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at $360.00. The next downside price objective for the bears is to close prices below solid technical support at the March low of $336.45. First resistance is seen at $355.00 and then at $357.80. First support is seen at $350.00 and then at this week’s low of $345.425.
What to do: Cover corn-for-feed needs through March 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 March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.