Hogs
Price action: August lean hogs rose 55 cents to $106.45, near mid-range and hit a contract high.
Fundamental analysis: August lean hog futures were boosted today by chart-based buying from the speculators as technicals are firmly bullish. Cash hog and pork market fundamentals are also solid. The latest CME lean hog index is up another $1.06 to $95.90 as of May 30, marking the biggest daily gain in the seasonal rise. Wednesday’s cash index projection is up another 44 cents to $96.34. The five-day rolling average cash hog price quote today is $97.79. The noon report today showed pork cutout value dipped 27 cents to $106.48, though prices remain at the highest levels since August of 2023. Movement at midday was good at 178.02 loads.
Hog traders are closely monitoring developments on the U.S.-China trade front. President Trump is likely to speak with Chinese President Xi Jinping this week, said White House Press Secretary Karoline Leavitt Monday. A senior U.S. official told Bloomberg the White House still sees a narrow path to de-escalation but warned that “patience is wearing thin.”
Technical analysis: August lean hog futures bulls have the solid overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. The next upside price objective for the hog bulls is to close August prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at $100.45. First resistance is seen at today’s contract high of $106.875 and then at $108.00. First support is seen at this week’s low of $104.625 and then at $103.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all corn-for-feed and soybean meal needs covered in the cash market through July.
Cattle
Price action: June live cattle futures fell 57.5 cents to $215.975, while most active August futures sunk $1.25 to $209.75, nearer session lows.
Fundamental analysis: June live cattle futures traded to the highest mark since the May 14 contract high before reversing lower and closing near session lows. Traders remain wary of a downturn in the cash cattle market, keeping discounts to the cash market high. Investing legend Bob Farrell has ten investment rules, one of which is “exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.” Traders continue to anticipate a top in the cash market will be unexpected and abrupt. They were somewhat rewarded in seeing cash cattle trade initiated at $230.00 in Iowa/Minnesota early this week, below last week’s average of $233.56 for the area. Still, countless times in this historic run, cash cattle have shook off bearish trade early in the week and posted a record by the time the end of the week came. If trade picks up at steady/firmer prices later this week as we anticipate, traders could be quick to cover shorts, but stiff technical resistance looms at the contract high made in April.
Wholesale beef ended the morning mixed as prices continue to stabilize at higher prices. Choice cutout rose 23 cents to $366.23 this morning, while Select fell 57 cents to $357.54. Movement remains strong as grocers keep purchases rolling amid the summer grilling season.
Both the cash and futures market for feeders have seen an uptick in volatility over the past month. The market is plagued by on again off again imports of cattle from Mexico. The feeder cattle index is most recently up another $1.83 to $301.13 and looks poised to challenge last month’s record highs. Futures are less optimistic, trading modestly under the cash market.
Technical analysis: August live cattle futures now see most of the volume in the cattle complex. Bulls continue to hold the technical advantage, though gains have stalled near the early May contract high closes. The May 12 contract high close at $211.60 stands as stiff resistance. Today’s break below $210.00 marks that area as initial resistance. The 10-day moving average at $209.40 limited most of the downside today and will be a key pivot going into the latter half of the week. Continued selling pressure eyes support at $208.40 then $205.70, the 40-day moving average.
August feeder cattle futures continue to trade largely sideways, struggling to break above recent highs in early trade. Bulls maintain a modest technical advantage and are looking to topple resistance at $303.25 on persistent strength. Bulls held support at $299.50, the 10-day moving average, today, which is backed by support at $$298.825 then $295.35.
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: You have all corn-for-feed and soybean meal needs covered in the cash market through July.