Hogs
Price action: August lean hogs rose 60 cents to $108.775, nearer the daily high and hit a five-week high.
Fundamental analysis: The lean hog futures market saw some technical buying featured today, as the near-term chart posture has improved. Strong gains in cattle futures to record highs today also supported buying interest in hog futures.
The latest CME lean hog index is down another 27 cents to $109.99 as of Aug. 1. Wednesday’s projected cash index price is down another 43 cents at $109.56. The national direct five-day rolling average cash hog price quote today is $112.95. The noon report today showed pork cutout value rose 50 cents to $118.29, led by gains in hams and bellies. Movement at midday was decent at 151.33 loads.
Technical analysis: Lean hog futures bulls have the firm overall near-term technical advantage and gained more power today. Bulls have restarted a price uptrend on the daily bar chart. The next upside price objective for the hog bulls is to close August prices above solid chart resistance at $112.00. The next downside price objective for the bears is closing prices below solid technical support at $105.00. First resistance is seen at $110.00 and then at $111.00. First support is seen at this week’s low of $107.325 and then at last week’s low of $106.20.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
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.
Cattle
Price action: August live cattle rose $3.375 to $234.275, nearer the session high and hit another contract and record high today. August feeder cattle rose $5.65 to $341.05, nearer the daily high and hit a contract/record high.
Fundamental analysis: The cattle futures market bulls are keeping their foot on the gas, with technical buying from the speculators featured amid no strong, early chart clues that market tops are close at hand. And the speculative bears do not want to step in front of a steaming locomotive.
Cash cattle and beef market fundamentals remain strong. Cash cattle prices last week $3.79 to $243.17, which is a new record high. Very light cash cattle trade has occurred early this week, with an average price at $240.00. The noon report today showed wholesale beef values rose again, with Choice-grade up $4.61 to $370.40, while Select-grade gained $4.42 to $346.01. Movement at midday was 65 loads. The Choice-Select spread is presently $24.39. Beef packer cutting margins remain in the red.
Technical analysis: Live and feeder cattle futures bulls have the solid overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at $240.00. The next downside technical objective for the bears is closing prices below solid technical support at $227.50. First resistance is seen at today’s contract high of $235.025 and then at $236.00. First support is seen at $232.00 and then at this week’s low of $229.125.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $350.00. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at today’s contract high of $341.875 and then at $343.00. First support is seen at today’s low of $335.725 and then at this week’s low of $332.025.
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.