Pro Farmer wishes you a Merry Christmas! Please be advised of the following holiday schedule:
Markets: Early close Wednesday; closed Thursday.
Reports: On Wednesday and Friday, we will observe an abbreviated schedule, publishing First Thing Today (8:00 a.m. CT) and After the Bell (Post-close). We will resume our regular publishing schedule on Monday, Dec. 29.
Hogs
Price action: Lean hog futures rose 62 1/2 cents to $85.975, nearer the session high and hit a two-month high.
Fundamental analysis: Lean hog futures today saw more technical buying from the speculative traders. Bulls have momentum on their side, to suggest more upside. Recently rising cash hog prices and a bullish near-term chart posture for the futures market will continue to support buying interest in lean hog futures. The February futures contract is above the latest CME lean hog index, which is also bullish for futures.
The latest CME lean hog index is down 2 cents to $83.71. Wednesday’s projected cash index price is up 1 cent at $83.72. Today’s national direct 5-day rolling average cash hog price quote is $69.41. The noon report today showed pork cutout value down $1.42 at $96.99, led by losses in hams and bellies. Movement at midday was decent at 194.65 loads.
Hog traders are awaiting the quarterly USDA hogs and pigs report and monthly cold storage report, out this afternoon. The hogs and pigs data is expected to show a decline in inventories and kept for breeding numbers.
Technical analysis: February lean hog futures bulls have the firm overall near-term technical advantage. Prices are trending up on the daily chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at $88.00. The next downside price objective for the bears is closing prices below solid technical support at $82.40. First resistance is seen at today’s high of $86.225 and then at $87.00. First support is seen at today’s low of $85.25 and then at this week’s low of $84.60.
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 February in the cash market. You should also have corn-for-feed needs purchased through February. Be prepared to make additional purchases.
Cattle
Price action: February live cattle fell $1.425 to $230.00, nearer the daily low. January feeder cattle lost $1.875 to $344.625, nearer the session low.
Fundamental analysis: The live and feeder cattle futures today saw profit-taking pressure from the shorter-term traders after prices in both markets hit two-month highs Monday.
USDA today reported very light cash cattle trading so far this week, at $229.00. USDA Monday reported cash cattle trading last week averaged$227.97, which is down 22 cents from the prior week’s average. The noon report today showed wholesale boxed beef cutout values mixed with Choice-grade down $3.05 at $359.83, while Select-grade gained $1.18 to $351.87. Movement at midday was 58 loads. The Choice-Select spread has narrowed to $7.96.
Technical analysis: The live and feeder cattle futures bulls still have the overall near-term technical advantage. Price uptrends are in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $225.00. First resistance is seen at today’s high of $231.625 and then at this week’s high of $232.325. First support is seen at $228.00 and then at last week’s low of $226.85.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $356.875, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $337.00. First resistance is seen at today’s high of $347.35 and then at this week’s high of $348.85. First support is seen at $340.00 and then at last week’s low of $337.00.
What to do: Cover corn-for-feed needs through February 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 February. You have corn-for-feed needs covered through February as well. Be prepared to make additional purchases if value prices continue.