Hogs
Price action: August lean hog futures fell $0.225 to $98.525, near mid-range.
Fundamental analysis: The lean hog futures market today saw a pause following recent good gains that have produced a price uptrend on the daily bar chart.
The USDA noon pork showed cutout value was up $0.33 at $96.39, led by gains in butts and hams. Movement at midday was good at 200.76 loads. The latest CME lean hog index is up 19 cents to $91.67. Tuesday’s projected CME index price is down 12 cents at $91.55. The national direct five-day rolling average cash hog price quote for today is $96.98.
Technical analysis: August lean hog futures see a price uptrend in place on the daily bar chart, to suggest a near-term market bottom is in place and that prices can continue to trend sideways to higher. 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 last week’s low of $95.425. First resistance is seen at last week’s high of $99.175 and then at $100.00. First support is seen at $96.60 and then at $95.00.
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 $0.125 to $239.10, near mid-range and hit a three-week low. August feeder cattle lost $0.125 to $360.50, nearer the daily high and also hit a three-week low.
Fundamental analysis: The cattle futures markets paused today as the bulls are trying to stop the bleeding but are not having much luck at present. Technical selling was featured today as the near-term charts have turned more bearish, as both markets are seeing price downtrends in place on their daily bar charts.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is reporting 32 total New World screwworm detected cases in the U.S. the past 30 days. There are now 18 active cases, all in Texas.
Livestock stress may increase this week because of hotter temperatures in the Plains states.
USDA at midday today reported cash cattle trading last week averaged $255.12, which is down $4.22 from the week prior’s average price. The noon report today showed lower boxed beef prices, with Choice grade down $1.17 at $385.90 and Select grade down $2.47 at $364.96. Movement at midday was 60 loads. The Choice-Select spread is presently plus $20.94.
Technical analysis: Live and feeder cattle futures markets see price downtrends in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at $247.50. The next downside technical objective for the bears is closing prices below solid technical support at the June low of $233.975. First resistance is seen at $241.00 and then at $243.00. First support is seen at today’s low of $238.30 and then at $237.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $363.125 and then at $365.00. First support is seen at today’s low of $356.625 and then at $355.00.
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.