Hogs
Price action: October lean hog futures fell $0.525 to $79.075, near the daily low and hit a 15-month low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure and weak long liquidation today. The near-term chart posture has quickly changed from price-friendly to firmly bearish. A weakening cash hog market is also bearish for lean hog futures.
The latest CME lean hog index is down 73 cents to $87.21. Wednesday’s projected CME index price is down another xx cents at $87.23. The national direct five-day rolling average cash hog price quote for today is $85.80. The USDA’s noon pork report today showed cutout value was down $1.02 at $88.76, led by losses in picnics, hams and bellies. Movement at midday was 172.44 loads.
Technical analysis: October lean hog futures see the technical posture as firmly bearish. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at the September high of $84.90. The next downside price objective for the bears is closing prices below solid technical support at $75.00. First resistance is seen at this week’s high of $81.375 and then at $82.00. First support is seen at $78.00 and then at $77.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $1.55 to $220.70, near the daily low and hit a four-week high early on. November feeder cattle lost $3.875 to $328.90, near the daily low and hit a five-week high early on.
Fundamental analysis: The live and feeder cattle futures markets today saw routine profit-taking pressure from the shorter-term specs and corrective action following recent good prices gains. Solidly higher cash trade last week did limit selling in futures today.
USDA at midday today reported now cash cattle trading so far this week. The agency said cash cattle traded last week at higher money, averaging $222.82, up $3.76 from the week prior’s cash trade average of $219.06. The noon report today showed mixed boxed beef prices, with Choice grade up $1.15 at $376.46 and Select grade down $0.19 at $354.36. Movement at midday was 56 loads. The Choice-Select spread is presently plus $22.10.
Technical analysis: Cattle futures bulls are enjoying price uptrends in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close October futures above resistance at the August high of $230.325. The next downside technical objective for the bears is closing prices below solid technical support at $214.00. First resistance is seen at today’s high of $222.825 and then at $224.00. First support is seen at this week’s low of $219.90 and then at $218.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $345.00. The next downside price objective for the bears is to close prices below solid technical support at $315.00. First resistance is seen at today’s high of $333.325 and then at $335.00. First support is seen at $327.00 and then at $325.00.
What to do: You have corn-for-feed and soymeal needs covered through September 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 September in the cash market.Be prepared to make purchases if value prices continue.