Hogs
Price action: August lean hog futures rose $1.45 to $96.50, near the daily high.
Fundamental analysis: The lean hog futures market today saw short covering. The near-term technicals remain firmly bearish amid a price downtrend in place on the daily bar chart. The market is still due for more of a corrective bounce.
The latest CME lean hog index is down 16 cents at $91.93. Thursday’s projected cash index price is up 49 cents $92.43. The national direct five-day rolling average cash hog price quote today is $96.69. The noon report today showed pork cutout value down $0.52 at $95.05, led by losses in butts. Movement at midday was decent at 180.16 loads.
Technical analysis: August lean hog futures bears still 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 closing 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 fell $0.35 to $248.85, near mid-range and hit a four-week high early on. August feeder cattle rose $0.55 to $367.425, nearer the session high.
Fundamental analysis: The live cattle futures markets saw a mild downside correction and feeders a pause today, following recent good gains. At present, the New World screwworm situation is still viewed as 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.
USDA at midday Wednesday reported very light cash cattle trading so far this week, averaging $254.00. 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 mixed. Choice-grade was down $3.47 at $396.11, while Select-grade rose $0.57 to $377.42. Movement at midday was decent at 81 loads. The Choice-Select spread at midday today was plus $18.69.
Cattle futures traders are looking forward to Thursday afternoon’s monthly USDA cattle-on-feed report, out one day earlier than usual due to the federal holiday on Friday, when markets are closed.
Technical analysis: Live and feeder cattle futures 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 closing prices below solid technical support at last week’s low of $233.975. First resistance is seen at today’s high of $249.85 and then at $251.65. First support is seen at $246.00 and then at Tuesday’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 this week’s high of $367.90 and then at $370.00. First support is seen at $364.00 and then at Tuesday’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.