Hogs
Price action: October lean hog futures rose $1.95 to $84.25, near the daily high.
Fundamental analysis: The lean hog futures market saw good short covering and perceived bargain buying today. Gains in cattle futures today also spilled over into better buying interest in hog futures.
The latest CME lean hog index is down 54 cents to $90.54 as of Sept. 3. Tuesday’s projected CME index price is down another 89 cents at $89.65. The national direct five-day rolling average cash hog price quote for today is $89.35. The USDA’s noon pork report today showed cutout value was up $7.31 at $100.17, led by a nearly $25 gain in bellies. Movement at midday was 120.77 loads.
Technical analysis: October lean hog futures bulls still have some momentum after recent chart action suggests a near-term market bottom is in place. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at the August low of $79.675. First resistance is seen at last week’s high of $84.90 and then at $86.00. First support is seen at today’s low of $82.55 and then at $81.00.
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: October live cattle rose $4.075 to $217.025, near the daily high and hit a two-week high. November feeder cattle rose $5.725 to $320.45, near the daily high and hit a three-week high.
Fundamental analysis: The cattle futures markets today saw more solid short covering and perceived bargain buying by the speculators. The Trump administration to get smaller U.S. beef processors ramped up appears to have also given a psychological boost to cattle futures. October live cattle futures continue to trade at a discount to the cash cattle market, which is also supportive for futures.
USDA at midday today reported cash cattle trading last week averaged $219.06. The agency said cash cattle trade the week prior averaged $219.25. The noon report today showed higher boxed beef prices, with Choice grade up $1.30 at $377.47 and Select grade up $1.07 at $356.94. Movement at midday was light at 37 loads. The Choice-Select spread is presently plus $20.53.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $222.50. The next downside technical objective for the bears is closing prices below solid technical support at the August low of $209.525. First resistance is seen at today’s high of $217.10 and then at $219.00. First support is seen at today’s low of $213.175 and then at $212.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $333.50. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at today’s high of $320.80 and then at $323.00. First support is seen at today’s low of $314.675 and then at $311.625.
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.