Hogs
Price action: October lean hogs fell 82 1/2 cents to $90.775, near mid-range and hit a two-week low. August lean hog futures expire Thursday.
Fundamental analysis: The lean hog futures market today saw some profit-taking pressure amid fading cash fundamentals and a solid decline in pork cutout value this week.
The latest CME lean hog index is down 23 cents to $110.02 as of Aug. 8. Thursday’s projected cash price is down 6 cents to $109.78. The national direct five-day rolling average cash hog price quote today is $108.99. The noon report today showed pork cutout value rose $2.58 to $117.28, led by gains in bellies. Movement at midday was 145.64 loads.
Technical analysis: Lean hog futures bulls still have the overall near-term technical advantage but faded today and need to show fresh power soon to keep a choppy price uptrend in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at the August high of $93.275. The next downside price objective for the bears is closing prices below solid technical support at the August low of $87.925. First resistance is seen at today’s high of $91.90 and then at this week’s high of $92.525. First support is seen at today’s low of $89.625 and then at $88.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: August live cattle fell 27 1/2 cents to $235.55, nearer the session low. August feeder cattle rose 50 cents to $345.875, near mid-range.
Fundamental analysis: The live cattle futures markets today paused and saw some consolidation after good gains early this week. Stiff technical resistance at the contract highs, which are just above present price levels in August live cattle and feeder cattle futures, did limit speculator buying interest in futures today. However, sellers in live cattle futures remain timid given the discount live cattle futures are still trading to the cash market.
Cash cattle trade has been slow to develop this week. USDA today reported very light trade so far, with steers averaging $232.00 and heifers averaging $245.00. The noon report today showed wholesale boxed beef values firmer again, with Choice grade up 46 cents to $391.04, while Select grade rose $3.28 to $368.92, narrowing the Choice-Select spread to $22.12. Movement at midday was 65 loads..
Technical analysis: Live and feeder cattle futures bulls have the overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $239.475. The next downside technical objective for the bears is closing prices below solid technical support at $230.00. First resistance is seen at $237.00 and then at today’s high of $238.80. First support is seen at today’s low of $234.35 and then at this week’s low of $231.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $349.125. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at $345.00 and then at $347.00. First support is seen at today’s low of $342.50 and then at $340.00.
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.