Hogs
Price action: June lean hog futures fell $0.575 to $102.625, nearer the session low.
Fundamental analysis: The lean hog futures market saw a corrective pullback today from good gains posted Tuesday. Gains in hog futures were limited by selling pressure in the cattle futures that saw prices there hit three-week lows.
The latest CME lean hog index is up 14 cents at $90.51. Thursday’s projected cash index price is up 54 cents at $91.05. The national direct five-day rolling average cash hog price quote today is $70.75. The noon report today showed pork cutout value down $0.26 at $99.08, led by losses in butts and picnics. Movement at midday was decent at 178.70 loads.
Technical analysis: June lean hog futures bears still have the overall near-term technical advantage. Prices are trending down 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 the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at today’s high of $103.775 and then at $105.00. First support is seen at $102.00 and then at this week’s low of $101.10.
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 April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $0.475 to $243.075, nearer the daily high and hit a three-week low early on. May feeder cattle fell $0.125 to $358.425, nearer the daily high and hit a three-week low early on.
Fundamental analysis: The cattle futures markets today saw mild follow-through technical selling pressure from recent losses that have produced significant near-term chart damage to suggest market tops are in place. It was especially disappointing price action for cattle futures market bulls today because there was keener risk in the general marketplace at mid-week.
USDA at midday today reported very light cash cattle trading taking place so far this week, with steers averaging $246.33 and heifers $246.00. Last week’s average cash cattle trade was $248.02. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down $1.09 at $385.09, while Select-grade was up $3.06 at $390.26. Movement at midday was 58 loads. The Choice-Select spread at midday today was minus $5.17.
Technical analysis: Cattle futures markets have seen price uptrends on the daily bar charts stall out. There are now chart clues to begin to suggest market tops are in place. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $252.00. The next downside technical objective for the bears is closing prices below solid technical support at $240.00. First resistance is seen at $244.00 and then at $246.80. First support is seen at $241.00 and then at $240.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $359.70 and then at Tuesday’s high of $364.20. First support is seen at $355.00 and then at $353.00.
What to do: Cover corn-for-feed needs through April 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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.