Hogs
Price action: June lean hog futures fell $0.675 to $102.45, nearer the session low and hit a more-than-three-month low.
Fundamental analysis: The lean hog futures market saw mild technical selling pressure amid a price downtrend in place on the daily bar chart.
The latest CME lean hog index is down 1 cent at $90.27. Wednesday’s projected cash index price is up 6 cents at $90.33. The national direct five-day rolling average cash hog price quote today is $69.80. The noon report today showed pork cutout value up $0.38 at $99.52, led by gains in ribs and hams. Movement at midday was 156.39 loads.
Technical analysis: June lean hog futures bears 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 this week’s high of $103.80 and then at $105.00. First support is seen at $102.00 and then at $101.00.
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 $2.90 to $251.425, nearer the session high and hit a contract and record high. May feeder cattle gained $2.025 to $374.85, near mid-range and hit a contract high.
Fundamental analysis: The cattle futures markets bulls are keeping the foot on the gas amid technical buying interest and solid cash cattle and beef market fundamentals. Improved risk appetite in the general marketplace today also favored the cattle market bulls.
USDA at midday today reported light cash cattle trading so far this week at an average of $247.93. Last week’s average cash trade was $248.38. That’s up $3.42 from the prior week’s average of $244.96. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was up $2.86 at $384.78, while Select-grade was down $0.56 at $383.08. Movement at midday was light at 43 loads. The Choice-Select spread at midday today was plus $1.70.
World Weather Inc. today said that in the Northern Plains, temperatures will be dropping well below average Friday into Sunday with some snow and windy conditions. This dramatic change in weather conditions after recent unusual warmth will likely cause livestock stress again. Another period of unusual warmth is likely for a few days next week.
Technical analysis: Cattle futures markets bulls are enjoying solid price uptrends on the daily bar charts. There are no early chart clues to suggest market tops are close at hand. The next upside price objective for the live cattle bulls is to close June futures above resistance at $255.00. The next downside technical objective for the bears is closing prices below solid technical support at $244.00. First resistance is seen at today’s contract high of $252.00 and then at $253.00. First support is seen at this week’s low of $248.20 and then at $246.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the record high of $381.025. The next downside price objective for the bears is to close prices below solid technical support at $365.00. First resistance is seen at today’s contract high of $377.575 and then at $380.00. First support is seen at this week’s low of $371.125 and then at $367.50.
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.