Hogs
Price action: April lean hog futures rose $1.025 to $92.30, near mid-range.
Fundamental analysis: Lean hog futures today saw a short-covering bounce following the recent steep sell off that has produced serious chart damage. More price strength in lean hog futures this week would at least stabilize the market.
The latest CME lean hog index is up 17 cents at $87.06. Wednesday’s projected cash index price is up 8 cents at $87.13. The national direct five-day rolling average cash hog price quote today is $63.40. The noon report today showed pork cutout value down $1.43 at $95.42, led by losses in bellies. Movement at midday was 141.07 loads.
Technical analysis: April lean hog futures bulls have seen serious near-term technical damage inflicted recently, to suggest still more downside price pressure. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at $95.00. The next downside price objective for the bears is closing prices below solid technical support at $89.00. First resistance is seen at today’s high of $93.00 and then at $93.75. First support is seen at last week’s low of $91.125 and then at $90.00.
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 March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $2.175 to $242.80, near mid-range and closed at a nearly four-month-high close. March feeder cattle gained $4.825 to $370.975, near mid-range and closed at a four-month-high close.
Fundamental analysis: The cattle futures markets got a boost today from sharply higher cash cattle trading activity last week, as well as fresh technical buying from the chart-based speculators.
USDA Monday reported cash cattle trading last week averaged $245.62, up $4.31 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down 86 cents at $366.91, while Select-grade rose 14 cents to $361.37. Movement at midday was 62 loads. The Choice-Select spread at midday today was plus $5.55.
Technical analysis: The live and feeder cattle futures bulls have the firm overall near-term technical advantage and gained more strength today, amid price uptrends in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above resistance at the contract high of $250.925. The next downside technical objective for the bears is closing prices below solid technical support at the February low of $234.55. First resistance is seen at today’s high of $244.00 and then at the February high of $244.575. First support is seen at $241.00 and then at $240.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at the contract high of $378.60. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen today’s high of $372.25 and then at the February high of $373.60. First support is seen at $367.50 and then at last week’s low of $363.35.
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 March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.