Hogs
Price action: August lean hogs surged $1.05 to $107.50, while nearby June futures fell a quarter to $99.975.
Fundamental analysis: Hog futures continue to grind higher amid ongoing cash market strength. Summer futures are building premiums over the cash market as traders have been encouraged in seeing cash fundamentals at the highest levels since August 2023. After consolidating the past couple of days, pork cutout pushed higher at midsession, rising 53 cents to $106.64. Gains in bellies and picnics offset losses in all other cuts. Bellies continue to lead the way higher as grocers are preparing for BLT season. Meanwhile, the CME lean hog index continues to chip higher as well. The index is up another 44 cents to $96.34 as of June 2. The preliminary calculation puts the index up another 41 cents to $96.75 tomorrow. Bulls have been encouraged by resurgent strength in the cash market, but some demand concerns remain as the tariff situation remains fluid, likely hindering pork exports.
Technical analysis: August lean hog futures closed higher for the fourth consecutive session today as bulls maintain full control of the technical advantage. Prices closed near contract highs as traders continue to build premiums over the cash market, anticipating sustained seasonal cash market strength through August. Resistance stands at $107.50 then $108.00 on another push higher. Bulls are seeking to hold prices above support at $106.30 on a reversal lower, with additional selling pressure finding support at the psychological $105.00 mark.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all corn-for-feed and soybean meal needs covered in the cash market through July.
Cattle
Price action: June live cattle surged $2.425 to $218.40, while August futures rose $2.60 to $212.35. August feeders jumped $2.65 to $303.875.
Fundamental analysis: Cattle futures edged higher, as technical support and hefty discounts to cash continue to curb any profound selling interest at present. However, there are broad sentiments that current cattle prices are not sustainable, with demand concerns ultimately creeping in amid recent robust price action in cash, futures and wholesale values alike. While the effects will not be seen immediately, they will eventually surface as grocers secure supplies for the grilling season as summer approaches. Meanwhile, packers have been faced with declining supplies of fed cattle, which have recently pared slaughter numbers, with last week’s slaughter one of the smallest for the week on record.
Cash trade has been slow to develop once again this week, though what has traded has been at lower prices. Hefty discounts in deferred futures indicate leeriness of extended gains amid heightened global demand uncertainty.
Choice boxed beef rose $1.21 to $366.65 in the noon report, while Select dipped 29 cents to $356.23, still maintaining solid ground, which has aided in easing severely negative packer margins. Movement continues to remain quite strong as grocers continue to secure cuts to meet summer grilling demand.
Technical analysis: June live cattle took out Tuesday’s high, settling at the highest level since the May 14 high of $218.625, which will now serve as initial resistance. Meanwhile, initial support will continue to serve at the 10- and 20-day moving averages, currently trading at $213.66 and $210.27. Today’s high range close charges bulls for a test of the May high, which is backed by resistance at $219.49 and $221.33.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have all corn-for-feed and soybean meal needs covered in the cash market through July.