Hogs
Price action: August lean hog futures fell $0.05 to $101.45, nearer the daily low.
Fundamental analysis: The lean hog futures market paused today from recent good gains amid a price uptrend in place on the daily bar chart. Bulls have been encouraged by rising cash hog prices. The USDA’s noon pork report today showed cutout value was down $0.31 at $104.51, led by declines in bellies. Movement at midday was 147.59 loads. The latest CME lean hog index is up 48 cents to $96.64. Thursday’s projected CME index price is up 44 cents at $97.08. The national direct five-day rolling average cash hog price quote for today was $100.46.
Technical analysis: August lean hog futures see a price uptrend firmly in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $105.00. The next downside price objective for the bears is closing prices below solid technical support at $96.325. First resistance is seen at this week’s high of $102.375 and then at $104.00. First support is seen at this week’s low of $100.975 and then at $100.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle fell $3.475 to $223.20, near the daily low and hit a nearly five-month low. August feeder cattle lost $8.375 to $341.175, near the daily low and hit a six-week low.
Fundamental analysis: The live cattle futures markets today saw technical selling kick in again, after a brief respite earlier this week. Both markets remain in firmly bearish near-term technical postures, although they have become oversold and are due for corrective upside bounces very soon. Fundamentally, the recent steep drop in the cash cattle market and declining boxed beef cutout values are also keeping cattle futures bulls mostly on the sidelines. Livestock stress continues high in the Plains states and will stay high because of the daily higher heat.
USDA at midday today reported very light cash cattle trading taking place at $232.00. The agency Monday reported average cash cattle trading last week at $238.28, down nearly $10 from the week-prior’s average of $248.01. The noon report today showed lower boxed beef prices, with Choice grade down $2.66 at $364.25 and Select grade down $1.68 at $352.55. Movement at midday was 68 loads. The Choice-Select spread is presently plus $11.70.
Technical analysis: Live and feeder cattle futures markets see solid price downtrends in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at $233.00. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $222.275. First resistance is seen at today’s high of $226.05 and then at this week’s high of $227.75. First support is seen at today’s low of $223.375 and then at $222.275.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $355.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at $345.00 and then at today’s high of $348.075. First support is seen at today’s low of $340.50 and then at last week’s low of $337.50.
What to do: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.