Hogs
Price action: December lean hogs rose 7 1/2 cents to $78.575, near mid-range.
Fundamental analysis: Lean hog futures market today saw a pause in the near-term price downtrend, but the market still looks heavy. Steadily falling cash hog prices and weakening pork cutout values limited the upside in futures today.
The latest CME lean hog index is down another 89 cents at $87.94. Tuesday’s projected cash hog index is down 94 cents at $87.00. Today’s national direct 5-day rolling average cash hog price quote is $81.50. The noon report today showed pork cutout value down 22 cents to $97.00, led by losses in butts. Movement at midday was decent at 194.63 loads.
Technical analysis: December lean hog futures bears have the overall near-term technical advantage. A price downtrend is in place on the daily bar chart and a minor bearish pennant pattern may now be forming. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at last week’s high of $83.25. The next downside price objective for the bears is closing prices below solid technical support at the July low of $77.725. First resistance is seen at $80.00 and then at $82.275. First support is seen at $77.725 and then at $76.00.
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 December in the cash market. For corn, you now have all needs through November covered in the cash market.
Cattle
Price action: December live cattle rose $2.125 to $221.275, near the daily high. January feeder cattle gained $5.725 to $326.275 and near the daily high.
Fundamental analysis: The live and feeder cattle futures bulls today showed needed strength as they try to halt the near-term price downtrends. Some improved risk appetite in the general marketplace encouraged the cattle market bulls today as the U.S. stock indexes appear to have stabilized following the downdrafts late last week. However, weakening cash cattle prices are likely to limit the upside potential in cattle futures.
USDA at midday today reported last week’s average cash cattle trading price was $225.06, down $3.64 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade down 74 cents to $369.99, while Select-grade rose 73 cents to $354.97. Movement at midday was light at 35 loads. The Choice-Select spread is presently $15.02.
Technical analysis: The live and feeder cattle futures bears still have the overall near-term technical advantage. Prices are in downtrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at last week’s high of $229.60. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $215.325. First resistance is seen at today’s high of 222.125 and then at $223.00. First support is seen at $218.00 and then at $215.325.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $340.00. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $310.05. First resistance is seen at $328.00 and then at $330.00. First support is seen at $320.00 and then at today’s low of $314.525.
What to do: Cover your corn-for-feed needs in the cash market through November.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through December. For corn, you have all needs through November covered in the cash market. Be prepared to make additional purchases if value prices continue.