Hogs
Price action: April lean hog futures rose 25 cents to $92.55, nearer the daily low.
Fundamental analysis: Lean hog futures today saw a pause following the recent steep sell off that has produced serious chart damage. Bulls are still shaky. More price strength in lean hog futures is needed this week to at least stabilize the market.
The latest CME lean hog index is up 7 cents at $87.13. Thursday’s projected cash index price is up 5 cents at $87.19. The national direct five-day rolling average cash hog price quote today is $62.50. The noon report today showed pork cutout value down 25 cents at $95.63, led by losses in ribs. Movement at midday was 174.46 loads.
Technical analysis: April lean hog futures bulls have seen serious near-term technical damage inflicted recently, to suggest still more downside price pressure. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at $95.00. The next downside price objective for the bears is closing prices below solid technical support at $89.00. First resistance is seen at today’s high of $93.125 and then at $93.75. First support is seen at last week’s low of $91.125 and then at $90.00.
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 fell 27 1/2 cents to $242.525, near mid-range. March feeder cattle fell 40 cents to $370.575, near mid-range.
Fundamental analysis: The cattle futures markets paused at mid-week, following gains on Tuesday that pushed the markets to four-month highs. Sharply higher cash cattle trading last week limited selling interest today.
USDA Monday reported cash cattle trading last week averaged $245.62, up $4.31 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down $1.26 at $363.50, while Select-grade rose 99 cents to $361.21. Movement at midday was 58 loads. The Choice-Select spread at midday today was plus $2.29.
Strong winds in Texas, Oklahoma and Kansas have started wildfires and caused travel problems, and may cause power outages at feedyards, as well as disrupt cattle moving to market this week.
Technical analysis: The live and feeder cattle futures bulls have the firm overall near-term technical advantage amid price uptrends in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above resistance at the contract high of $250.925. The next downside technical objective for the bears is closing prices below solid technical support at the February low of $234.55. First resistance is seen at this week’s high of $244.00 and then at the February high of $244.575. First support is seen at $241.00 and then at $240.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at the contract high of $378.60. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen at this week’s high of $372.25 and then at the February high of $373.60. First support is seen at $367.50 and then at last week’s low of $363.35.
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.