Hogs
Price action: June lean hog futures fell $1.725 to $99.70, nearer the daily low and closed at a 4.5-month low close.
Fundamental analysis: The lean hog futures market saw technical selling kick in again today. The near-term chart posture for June hogs has deteriorated to suggest still more selling from the speculators in the near term. Prices are in a downtrend on the daily bar chart.
The latest CME lean hog index is up 7 cents at $91.10. Wednesday’s projected cash index price is up 9 cents at $91.19. The national direct five-day rolling average cash hog price quote today is $94.75. The noon report today showed pork cutout value up $0.67 at $96.64, led by gains in hams and bellies. Movement at midday was decent at 174.94 loads.
Technical analysis: June lean hog futures bears have the overall near-term technical advantage. Prices are in a downtrend 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 $105.00. The next downside price objective for the bears is closing prices below solid technical support at $95.00. First resistance is seen at this week’s high of $101.95 and then at $103.00. First support is seen at $99.00 and then at $98.00.
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 hand-to-mouth. You should also have corn-for-feed needs hand-to-mouth. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $0.25 to $253.475, near mid-range. August feeder cattle gained $0.575 to $372.40, nearer the daily low.
Fundamental analysis: The live cattle futures markets bulls are back in business at mid-week, following Monday’s losses.
USDA at midday today reported very light cash cattle trading taking place at an average price of $255.00 for steers and $255.88 for heifers. USDA Monday reported last week’s average cash cattle trading price at $255.02. That’s $8.84 above the prior week’s average cash cattle price. The noon report today showed wholesale boxed beef cutout values weaker. Choice-grade was down $1.62 at $390.72, while Select-grade fell $0.65 to $391.59. Movement at midday was 49 loads. The Choice-Select spread at midday today was minus $0.87.
World Weather Inc. today said variable temperatures in the Northern Plains the next seven days could still stress some livestock.
Technical analysis: Cattle futures markets bulls have the solid overall near-term technical advantages. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $256.625. The next downside technical objective for the bears is closing prices below solid technical support at $240.925. First resistance is seen at $255.00 and then at $256.625. First support is seen at $351.00 and then at this week’s low of $249.40.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen at $376.00 and then at $379.45. First support is seen at $370.00 and then at Tuesday’s low of $367.75.
What to do: You are hand to mouth for corn for feed needs. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you are hand to mouth for feed needs. You have corn-for-feed needs in the cash market as well. Be prepared to make additional purchases if value prices continue.