Hogs
Price action: August lean hog futures rose $0.925 to $98.20, near mid-range after hitting a three-week high early on.
Fundamental analysis: The lean hog futures market today saw short covering and perceived bargain buying from the speculators. Recent price gains have negated a price downtrend on the daily chart and prices are now starting to trend up to suggest a market bottom is in place.
The USDA noon pork showed cutout value was down $2.96 at $94.70, led by losses in bellies. Movement at midday was 143.21 loads. The latest CME lean hog index is down 14 cents to $91.41. Wednesday’s projected CME index price is down 17 cents at $91.24. The national direct five-day rolling average cash hog price quote for today is $97.05.
Technical analysis: August lean hog futures now see a fledgling price uptrend in place 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 $100.00. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of $95.425. First resistance is seen at today’s high of $99.175 and then at $100.00. First support is seen at $97.00 and then at $96.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle fell $1.15 to $242.425, nearer the daily low and hit a two-week low. August feeder cattle fell $2.875 to $364.60, nearer the daily low and also hit a two-week low.
Fundamental analysis: The cattle futures markets today saw more profit-taking pressure from recent gains, along with some fresh technical selling as price uptrends on the daily bar charts for the August contracts have been negated.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 27 total New World screwworm detected cases in the U.S. and all still in Texas and New Mexico. There are now 20 active cases, all in Texas. in the cross-border screwworm fight.
High heat and humidity across all of the Midwest this week is stressing livestock.
USDA at midday today reported very light cash cattle trading taking place at an average price of $253.00. The agency Monday reported cash cattle trading prices last week averaged $259.34, down 29 cents from the week prior. The noon report today showed higher boxed beef prices, with Choice grade up $3.54 at $394.98 and Select grade up $1.17 at $375.35. Movement at midday was 50 loads. The Choice-Select spread is presently plus $19.63.
Technical analysis: Live and feeder cattle futures markets have seen their price uptrends negated. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $251.65. The next downside technical objective for the bears is closing prices below solid technical support at the June low of $233.975. First resistance is seen at this week’s high of $245.60 and then at $247.50. First support is seen at today’s low of $241.15 and then at $240.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $355.00. First resistance is seen at today’s high of $367.75 and then at this week’s high of $370.45. First support is seen at today’s low of $362.075 and then at $360.00.
What to do: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through July in the cash market.Be prepared to make purchases if value prices continue.