Hogs
Price action: June lean hog futures fell $0.825 to $105.05, near the session low.
Fundamental analysis: The lean hog futures market saw weak long liquidation and fresh technical selling today. Weakening cash hog and lean hog index prices are pressuring the futures market.
The latest CME lean hog index is down 42 cents at $90.76. Wednesday’s projected cash index price is down another 28 cents at $90.48. The national direct five-day rolling average cash hog price quote today is $70.55. The noon report today showed pork cutout value down $1.25 at $96.32, led by losses in loins and bellies. Movement at midday was decent at 185.54 loads.
Technical analysis: April lean hog futures bears have the near-term technical advantage and are working to restart a price downtrend 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 $108.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $102.95. First resistance is seen at $106.00 and then at this week’s high of $107.35. First support is seen at $104.00 and then at $103.00.
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 $3.075 to $243.275, near the daily high and hit another 5.5-month high. May feeder cattle gained $5.15 to $366.475, near the daily high and hit a 5.5-month high.
Fundamental analysis: The cattle futures markets saw more chart-based buying from the speculators featured today. June live cattle and May feeders closed at technically bullish monthly and quarterly high closes today. Improved risk appetite in the general marketplace today supported the cattle futures bulls.
No cash cattle trading has been reported by USDA so far this week. The agency on Monday reported cash cattle trading last week averaged $235.69—up 68 cents from the week prior. The noon report today showed wholesale boxed beef cutout values higher again. Choice-grade was up $2.34 at $396.44, while Select-grade was up $3.78 at $394.79. Movement at midday was 50 loads. The Choice-Select spread at midday today narrowed to plus $1.65.
Technical analysis: Cattle futures markets bulls are enjoying price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $244.475. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $224.225. First resistance is seen at $244.475 and then at $246.00. First support is seen at today’s low of $239.75 and then at this week’s low of $238.725.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at $375.00. The next downside price objective for the bears is to close prices below solid technical support at $345.00. First resistance is seen at today’s high of $368.00 and then at $370.00. First support is seen at today’s low of $361.325 and then at this week’s low of $359.75.
What to do: Cover corn-for-feed needs through March 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.