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Hogs
Price action: April lean hog futures fell $1.40 to $95.675, near the daily low.
Fundamental analysis: Lean hog futures today saw profit-taking pressure and took back all of Wednesday’s gains. Keener risk aversion in the general marketplace today also aided the hog futures bears.
The latest CME lean hog index is up 34 cents at $90.18. Friday’s projected cash index price is up another 37 cents at $90.55. The national direct five-day rolling average cash hog price quote today is $67.90. The noon report today showed pork cutout value up 56 cents at $99.18, led by gains in ribs. Movement at midday was 157.31 loads.
USDA this morning reported U.S. pork export sales of 36,100 MT for the week ended Feb. 26, which were down 15% from the previous week but up 8% from the four-week average.
Technical analysis: April lean hog futures bulls still have the overall near-term technical advantage. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at the contract high of $99.80. The next downside price objective for the bears is closing prices below solid technical support at the February low of $91.125. First resistance is seen at this week’s high of $97.30 and then at $99.00. First support is seen at this week’s low of $94.70 and then at $94.00.
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 17 1/2 cents to $238.525, near mid-range. March feeder cattle fell $1.325 to $362.60, near mid-range.
Fundamental analysis: The cattle futures markets today saw pauses and some price consolidation after Wednesday’s solid gains. Cash and beef market fundamentals that remain overall positive. However, trader/investor risk appetite in the general marketplace is still shaky amid the Iran war, which could limit the upside in the cattle futures markets in the near term..
USDA at midday today reported no cash trade yet this week. Live cattle futures continue to trade below the cash market, which is supportive for futures. USDA Monday reported last week’s cash cattle trading averaged $242.71. The noon report today showed wholesale boxed beef cutout values narrowly mixed. Choice-grade was down 10 cents at $388.47, while Select-grade rose 56 cents to $380.91. Movement at midday was 48 loads. The Choice-Select spread at midday today was plus $7.56.
USDA this morning reported U.S. beef export sales totaled 11,200 MT during the week ended Feb. 26, down 14% from the previous week and down 29% from the four-week average.
Technical analysis: The live and feeder cattle futures have seen price uptrends on the daily bar charts negated to produce near-term technical damage. The next upside price objective for the live cattle bulls is to close April futures above resistance at $242.50. The next downside technical objective for the bears is closing prices below solid technical support at this week’s low of $228.525. First resistance is seen at today’s high of $239.95 and then at $241.00. First support is seen at Wednesday’s low of $234.80 and then at $232.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance the February high of $373.60. The next downside price objective for the bears is to close prices below solid technical support at this week’s low of $350.30. First resistance is seen at today’s high of $364.825 and then at $367.50. First support is seen at $360.00 and then at $358.00.
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.