Hogs
Price action: October lean hogs fell 17 1/2 cents to $91.60, near mid-range. August hog futures expire Thursday.
Fundamental analysis: The lean hog futures market is seeing limited buying interest this week amid weakening cash hog market fundamentals. However, sellers are also timid amid the early-week strength in the cattle futures markets.
The latest CME lean hog index is down 23 cents to $110.02 as of Aug. 8. Wednesday’s projected cash index price is down 18 cents at $109.84.
The national direct five-day rolling average cash hog price quote today is $110.73. The noon report showed pork cutout value fell $2.91 to $116.18, led by losses in bellies. Movement at midday was good at 191.55 loads.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage. A choppy price uptrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $94.40. The next downside price objective for the bears is closing prices below solid technical support at the August low of $87.925. First resistance is seen at today’s high of $92.525 and then at last week’s high of $93.275. First support is seen at this week’s low of $90.60 and then at $90.00.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage. A choppy price uptrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $94.40. The next downside price objective for the bears is closing prices below solid technical support at the August low of $87.925. First resistance is seen at $92.50 and then at last week’s high of $93.275. First support is seen at $90.00 and then at $89.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: August live cattle rose $2.75 to $235.825, near the session high. August feeder cattle gained $5.15 to $345.995, near the daily high.
Fundamental analysis: The cattle futures bulls needed to step up and show decent price strength early this week, following last Friday’s big downdrafts, and they have done just that. Once again, the cattle futures bulls show keen resilience when it looks like they are on the ropes. Live cattle futures discounts to the cash cattle market continue to support buying interest in futures. Strong gains in the beef market this week are also supporting futures. Solid losses in the corn futures market today, following a very price-bearish USDA report, gave feeder cattle futures an extra boost.
The noon report today showed wholesale boxed beef cutout values soaring again at midday, with Choice up $8.50 to $390.02, while Select grade rose $5.39 to $365.00. Movement at midday was 69 loads. The current Choice-Select spread is $25.02. There has been no cash cattle trade reported so far this week. Last week’s cash cattle trading average was $242.01.
Technical analysis: Live and feeder cattle futures bulls have the overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $239.475. The next downside technical objective for the bears is closing prices below solid technical support at $227.50. First resistance is seen at $235.00 and then at $236.00. First support is seen at this week’s low of $231.00 and then at $230.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $349.125. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at $343.00 and then at $344.00. First support is seen at today’s low of $339.575 and then at $337.50.
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: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.