Hogs
Price action: August lean hog futures fell $0.575 to $95.775, near the daily low.
Fundamental analysis: The lean hog futures market today saw renewed technical selling as the near-term charts remain 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 better corrective bounce in the near term.
The latest CME lean hog index is down 15 cents at $92.75. Tuesday’s projected cash index price is down 66 cents to $92.09 as of June 12. The national direct five-day rolling average cash hog price quote today is $96.85. The noon report today showed pork cutout value up $1.60 at $98.99, led by gains in bellies. Movement at midday was good at 194.53 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 closing prices below solid technical support at the November low of $93.675. First resistance is seen at 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 $2.075 to $243.25, near the daily high. August feeder cattle gained $4.125 to $361.55, near the session high and hit a three-week high.
Fundamental analysis: The cattle futures markets saw another session of price gains—making it three out of the past four with higher daily closes. The current total of screwworm cases in the U.S. now stands at 12 as of Monday morning, with all either in Texas or New Mexico. “U.S.’s screwworm fix is still a year away, risking more spread,” read a weekend news headline from Bloomberg. The NWS situation is so far leaning slightly friendly for cattle futures, but that could change.
JBS, the world’s largest meatpacker and the largest U.S. beef processor by volume, announced Friday it plans to close a plant in Souderton, Pennsylvania, in response to short cattle supplies.
USDA at midday today reported last week’s cash cattle trading averaged $256.08, down 45 cents from the week prior. The noon report today showed wholesale boxed beef cutout values posting good gains. Choice-grade was up $2.45 at $394.38, while Select-grade rose $2.65 to $375.37. Movement at midday was light at 29 loads. The Choice-Select spread at midday today was plus $19.01.
Technical analysis: Live cattle futures still see a price downtrend barely in place on their daily bar charts. However, the price downtrend on the daily chart for feeder futures has been negated. 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 the Junes high of $245.225 and then at $247.50. First support is seen at today’s low of $240.90 and then at $238.55.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $366.125. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at $364.00 and then at $366.125. First support is seen at today’s low of $357.50 and then at $353.00.
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.