Hogs
Price action: June lean hog futures fell $0.25 to $105.875, nearer the session low.
Fundamental analysis: The lean hog futures market today saw a mild corrective pullback following two sessions in a row of good price gains. Weakness in the cash hog index recently also limited buying interest in hog futures today.
The latest CME lean hog index is down 28 cents at $91.18. Tuesday’s projected cash index price is down another 42 cents at $90.76. The national direct five-day rolling average cash hog price quote today is $70.70. The noon report today showed pork cutout value up $1.89 at $98.45, led by gains in all cuts. Movement at midday was 121.98 loads.
Technical analysis: April lean hog futures bears have the slight near-term technical advantage. However, a price downtrend on the daily bar chart is in serious jeopardy of being negated. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $102.95. First resistance is seen at today’s high of $107.35 and then at $109.00. First support is seen at $105.00 and then at $104.00.
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 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 rose $1.425 to $240.20, nearer the daily high and hit a 5.5-month high. May feeder cattle gained $1.50 to $361.325, near mid-range and a six-week high.
Fundamental analysis: The cattle futures markets saw chart-based buying from the speculators featured today as the technicals have turned more price-friendly for both markets the past couple weeks.
USDA at midday today reported cash cattle trading last week averaged $235.69—up 68 cents from the week prior. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $2.69 at $395.66, while Select-grade was up $0.90 at $390.77. Movement at midday was light at 28 loads. The Choice-Select spread at midday today was plus $4.89.
Technical analysis: Cattle futures markets bulls are enjoying price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $244.475. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $224.225. First resistance is seen at today’s high of $241.625 and then at $243.00. First support is seen at $238.00 and then at $236.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at $375.00. The next downside price objective for the bears is to close prices below solid technical support at $345.00. First resistance is seen at today’s high of $364.525 and then at $366.00. First support is seen at $359.00 and then at $357.00.
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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.