Hogs
Advice: We advise livestock producers to cover half of your November and December soymeal needs in the cash market. We also advise covering all corn-for-feed needs for August in the cash market, along with half of your needs for September and October. For soymeal, you now 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 now have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.
Price action: July lean hog futures climbed 60 cents to $112.825 and closed near session highs.
Fundamental analysis: Hog futures turned higher after profit-taking efforts yesterday, supported by building gains in the CME lean hog index. The index is up another 89 cents to $110.44 as of June 23, continuing to build on seasonal strength. The index is at the highest mark since August 2022, but remains well below the peak of that year. Still, the index shows no signs of slowing down, as the preliminary calculation puts the index up another 97 cents to $111.41 tomorrow. Pork cutout continues to pull back from Monday’s peak, as trade at midsession was 18 cents lower. Losses in hams and loins led cutout lower, though bellies continue to show strength, climbing another $4.29 to $197.26. Bellies continue to rise ahead of anticipated BLT features over the next couple months as tomato season comes full swing. The Cold Storage report from USDA will be released this afternoon. The five-year average is a 28.4-million-lb. decline in pork stocks during the month of May.
Technical analysis: July lean hogs made up a portion of yesterday’s losses. Bulls continue to maintain full control of the technical advantage. Additional profit-taking is still possible given the overbought nature of the market, as yesterday’s weakness did little to offset those conditions. Additional strength finds resistance at $113.325, which is reinforced by the contract high at $113.7. Support comes in at yesterday’s low of $111.75, which is backed by the 10-day moving average at $111.05.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: NEW ADVICE – Cover half of your November and December soymeal needs in the cash market. Cover all corn-for-feed needs for August and half of September and October in the cash market. For soymeal, you now 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 now have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.
Cattle
Advice: We advise livestock producers to cover half of your November and December soymeal needs in the cash market. We also advise covering all corn-for-feed needs for August in the cash market, along with half of your needs for September and October. For soymeal, you now 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 now have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.
Price action: August live cattle fell 57.50 cents to $208.975, while August feeders rose 5 cents to $302.30.
Fundamental analysis: Cattle futures edged lower but held an inside range as steep futures’ discounts to cash continue to curb earnest selling interest thus far. Additional support stemmed from solid retail demand as grocers continue to ramp up purchases for Fourth of July features. Last week’s sales in the beef market made fresh peak for the year.
In the noon report, Choice rose 76 cents to $395.01, while Select dipped $3.77 to $378.64, while movement totaled 62 loads. Meanwhile, cash trade has been slow to develop this week, as packers hold out for lower prices, though feedlots still have hopes for higher prices.
Feeders were able to modest gains despite selling in fats, with extended technical selling in corn underpinning prices.
This afternoon, USDA will detail frozen meat stocks at the end of May in this afternoon’s Cold Storage Report. The five-year average is a 28.7-million-lb. decline in beef stocks.
USDA will also release its weekly export sales data early Thursday morning.
Technical analysis: August live cattle were pressured by the 40-, 10- and 20-day moving averages, layered from $210.66 to $212.94, though initial support at this week’s low of $208.10, which is backed by support at $207.92 limited heftier selling. Meanwhile, near-term oversold conditions should continue to limit more robust selling. However, bears will look toward securing a close below the 100-day moving average of $201.29, while bulls look to breach the June 9 high of $220.05.
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: NEW ADVICE – Cover half of your November and December soymeal needs in the cash market. Cover all corn-for-feed needs for August and half of September and October in the cash market. For soymeal, you now 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 now have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.