Hogs
Price action: October lean hog futures rose $0.675 to $84.35, nearer the daily high.
Fundamental analysis: The lean hog futures market saw modest short covering today but bears still have some momentum and confidence. The cash hog market is declining, to keep buyer interest in futures limited. The latest CME lean hog index down 55 cents to $97.58. Wednesday’s projected CME index price is down 51 cents at $97.17. The national direct five-day rolling average cash hog price quote for today is $99.43. The USDA’s noon pork report today showed cutout value was up $1.64 at $102.55, led by gains in picnics and hams. Movement at midday was 154.46 loads.
Technical analysis: October lean hog futures see a potential bearish pennant pattern forming on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at the July high of $89.55. The next downside price objective for the bears is closing prices below solid technical support at the June low of $79.775. First resistance is seen at this week’s high of $84.90 and then at $86.00. First support is seen at $83.00 and then at last week’s low of $82.10.
What to do: Get current with feed coverage.
Hedgers: You currently have all 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: October live cattle rose $1.175 to $227.90, near the daily high. September feeder cattle rose $3.60 to $346.15, near the daily high and closed at a two-week high close.
Fundamental analysis: The cattle futures markets today extended their recent gains. For October live cattle and September feeders, technical odds have improved that near-term market bottoms are in place. Both markets are in fledgling price uptrends on the daily bar charts.
Teamsters Local 455, the union representing the roughly 1,700 unionized workers, voted down the latest contract offer Monday, a local union spokesperson told the local 9NEWS TV station. “Our members have spoken,” the spokesperson said in an email. “They’re demanding more, and we expect to get back to the bargaining table as soon as possible.”
USDA at midday today reported very light cash cattle trading so far this week, with steers averaging $235.00 and heifers $233.00. The agency Monday reported cash cattle trade last week averaged $233.06, which compares to an average of $230.48 fetched the week prior. The noon report today showed higher boxed beef prices, with Choice grade up $2.76 at $369.49 and Select grade up $1.29 at $345.74. Movement at midday was 55 loads. The Choice-Select spread is presently plus $23.78.
Technical analysis: October live cattle futures see a fledgling price uptrend in place on the daily bar chart. The next upside price objective for the live cattle bulls is to close October futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the July low of $216.95. First resistance is seen at this week’s high of $229.55 and then at $232.00. First support is seen at today’s low of $225.50 and then at $224.00.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $355.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $337.90. First resistance is seen at this week’s high of $348.05 and then at $350.00. First support is seen at $342.50 and then at $340.00.
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.