Hogs
Price action: October lean hogs rose $1.10 to $91.775, nearer the daily high. August hog futures expire Thursday.
Fundamental analysis: After three straight sessions of price losses the lean hog futures bulls got in gear today, to keep alive the price uptrend in place on the daily bar chart. Stable cattle futures prices today, following their strong losses Friday, were also a positive element for the hog futures market,
The latest CME lean hog index is up 50 cents to $110.10 as of Aug. 6, rebounding from recent weakness.
The noon report today showed pork cutout rose $2.05 to $119.45, led by gains in loins, picnics and butts. Movement at midday was 183.06 loads.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage. A choppy price uptrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $94.40. The next downside price objective for the bears is closing prices below solid technical support at the August low of $87.925. First resistance is seen at $92.50 and then at last week’s high of $93.275. First support is seen at $90.00 and then at $89.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: August live cattle rose 52 1/2 cents to $233.075, nearer the session high. August feeder cattle gained 82 1/2 cents to $340.225, nearer the daily high.
Fundamental analysis: The live and feeder cattle futures markets bulls today at least stabilized prices after last Friday’s strong losses. Bulls appear to be exhausted from the record-setting price runs the past few months. Price action will be extra important Tuesday. Stronger selling pressure Tuesday would begin to suggest near-term market tops are in place.
USDA Secretary Brooke Rollins said Saturday she will have a major announcement this week in the battle against New World Screwworm, the flesh-eating pest that has been moving up from Central America through Mexico, forcing the periodic suspension of U.S. livestock imports.
Cash cattle trade last week averaged $242.01, down $1.16 from last week’s average. The noon report today showed Choice grade boxed beef cutout value rose 51 cents to $379.35. Select grade was up $1.23 to $356.32. Movement at midday was 49 loads. The Choice Select spread is presently $23.03.
Technical analysis: Live and feeder cattle futures bulls have the overall near-term technical advantage, but now appear exhausted. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $239.475. The next downside technical objective for the bears is closing prices below solid technical support at $227.50. First resistance is seen at today’s high of $234.30 and then at $235.00. First support is seen at today’s low of $231.00 and then at $230.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $349.125. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at today’s high of $342.20 and then at $343.00. First support is seen at today’s low of $335.75 and then at $335.00.
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: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.