Hogs
Price action: August lean hog futures fell $0.725 to $95.05, near the daily low.
Fundamental analysis: The lean hog futures market today saw more chart-based selling as the near-term technicals remain firmly bearish amid a price downtrend in place on the daily bar chart. The market is still somewhat short-term oversold, technically, and due for a corrective bounce soon. Lean hog bulls are disappointed the hog futures have not gained any traction amid the solid rallies in cattle futures markets the past few sessions.
The latest CME lean hog index is down 66 cents at $92.09. Monday’s projected cash index price is down 16 cents $91.93. The national direct five-day rolling average cash hog price quote today is $96.32. The noon report today showed pork cutout value down $1.29 at $95.83, led by losses in butts and bellies. Movement at midday was 140.36 loads.
Technical analysis: August lean hog futures bears have the solid overall near-term technical advantage. Prices are in a steep downtrend 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 to close prices below solid technical support at the November low of $93.675. First resistance is seen at last Friday’s high of $97.075 and then at $99.00. First support is seen at the June low of $93.975 and then at $93.00.
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 rose $5.95 to $249.20, near the daily high and hit a four-week high. August feeder cattle gained $5.325 to $366.875, nearer the session high and hit a five-week high.
Fundamental analysis: The cattle futures markets saw a strong session of price gains, making it four out of the past five with higher daily closes. At present, the New World screwworm situation is leaning fully bullish for cattle futures. The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 12 total New World screwworm detected cases, in Texas and New Mexico.The technical postures for live and feeder cattle futures have also markedly improved the past week, which is inviting the chart-based specs back to the long sides.
USDA at midday today reported very light cash cattle trading so far this week has $354.00. The agency said cash trade last week averaged $256.08, down 45 cents from the week prior. The noon report today showed wholesale boxed beef cutout values posting more gains. Choice-grade was up $4.86 at $399.91, while Select-grade rose $1.58 to $377.99. Movement at midday was 57 loads. The Choice-Select spread at midday today widened to plus $21.92.
Technical analysis: Live and feeder cattle futures now see price uptrends in place on their daily bar charts and the bulls have gained technical momentum. 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 to close prices below solid technical support at last week’s low of $233.975. First resistance is seen at today’s high of $248.65 and then at $250.00. First support is seen at $246.00 and then at today’s low of $242.95.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $372.50. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $367.90 and then at $370.00. First support is seen at $364.00 and then at today’s low of $360.20.
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.