Hogs
Price action: December lean hog futures rose $0.825 to $70.95, nearer the daily high and hit a two-week high today.
Fundamental analysis: The lean hog futures market saw more short covering and perceived bargain hunting today and the bulls have momentum to begin to suggest a market bottom may be in place. Gains in futures were limited, however, as cash hog market prices continue to trend down. The latest CME lean hog index is down $0.51 at $80.20. Tuesday’s projected CME index price is down $0.57 at $79.63. The national direct five-day rolling average cash hog price quote for today is $77.87. The USDA’s noon pork report today showed cutout value was up $3.26 at $87.74, led by gains in picnics, hams and bellies. Movement at midday was 146.53 loads.
Technical analysis: December lean hog futures still see the technical posture as overall bearish. However, more price gains early this week would suggest a market bottom is in place. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $74.375, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $67.95. First resistance is seen at today’s high of $71.20 and then at $71.625. First support is seen at $70.00 and then at $69.00.
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 September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: December live cattle fell $1.50 to $219.975, nearer the daily low. November feeder cattle lost $1.025 to $330.125, near mid-range.
Fundamental analysis: The live and feeder cattle futures markets saw some mild profit taking and chart consolidation to start the trading week. Overall supply and demand fundamentals are still bullish for cattle and beef markets.
USDA today reported average cash cattle trading last week came in at $219.80, down 87 cents from the week prior average of $220.67. The noon report today showed gains in boxed beef prices, with Choice grade up $2.22 at $376.41 and Select grade up $2.09 at $356.58. Movement at midday was light at 39 loads. The Choice-Select spread is presently plus $19.83.
Technical analysis: December live cattle and November feeders are seeing prices trending up on their daily charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at the August high of $229.425. The next downside technical objective for the bears is closing prices below solid technical support at $214.625. First resistance is seen at last week’s high of $223.85 and then at the September high of $225.50. First support is seen at last week’s low of $218.75 and then at $216.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $345.00. The next downside price objective for the bears is to close prices below solid technical support at $316.175. First resistance is seen at last week’s high of $336.875 and then at $339.00. First support is seen at today’s low of $327.825 and then at last week’s low of $326.425.
What to do: You have corn-for-feed and soymeal needs covered through September 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 September in the cash market. Be prepared to make purchases if value prices continue.