Hogs
Price action: June lean hog futures rose $0.275 to $102.175, nearer the daily low.
Fundamental analysis: The lean hog futures market saw tepid short covering and perceived bargain hunting featured today. Strong gains in the cattle futures markets to start the trading week also limited selling interest in hogs.
The latest CME lean hog index is up 1 cent at $91.44. Tuesday’s projected cash index price is down 18 cents at $91.26. The national direct five-day rolling average cash hog price quote today is $90.84. The noon report today showed pork cutout value up $0.68 at $100.29, led by gains in ribs and butts. Movement at midday was 142.80 loads.
Technical analysis: June lean hog futures bears still have the overall near-term technical advantage. Prices are trending down 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 the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at last week’s high of $103.775 and then at $105.00. First support is seen at $101.00 and then at the April low of $100.175.
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 covered through April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $3.725 to $248.95, near the session high. May feeder cattle gained $6.55 to $367.45, nearer the daily high.
Fundamental analysis: The cattle futures markets today saw strong buying interest on perceived bargain hunting after the recent sell off that drove prices to three-week lows last week. Bulls are almost right back in business and once again have shown keen resilience on price setbacks. However, from a technical perspective, the bulls need to show more price strength this week to repair near-term chart damage and to then suggest prices can challenge the April highs.
USDA at midday today reported cash cattle trading last week averaged $246.18, which is down $1.86 from last week’s average trade of $248.02. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up $1.42 at $388.42, while Select-grade was up $1.67 at $387.74. Movement at midday was light at 39 loads. The Choice-Select spread at midday today was plus $0.68.
Technical analysis: Cattle futures bulls the past two sessions have begun to repair near-term technical damage but need to show still more power this week to suggest a retest of the April highs. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $252.00. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $240.925. First resistance is seen at $250.00 and then at $252.00. First support is seen at $246.50 and then at $245.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $377.575. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $354.05. First resistance is seen at $368.00 and then at $370.00. First support is seen at $365.00 and then at today’s low of $360.90.
What to do: Cover corn-for-feed needs through April in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.