Hogs
Price action: April lean hog futures rose $1.475 to $96.625, nearer the session high.
Fundamental analysis: Lean hog futures today saw solid technical buying to keep the price uptrend on the daily bar chart alive and well. The April futures solid premium to the cash market suggests futures traders think there is still more upside for the cash hog market in the coming weeks. The latest CME lean hog index is up 6 cents at $85.78. Tuesday’s projected cash index price is down 7 cents at $85.71. The national direct five-day rolling average cash hog price quote today is $59.98. The noon report today showed pork cutout value up $2.43 at $96.65, led by a gain in butts. Movement at midday was 163.86 loads.
Technical analysis: April lean hog futures bulls have the solid overall near-term technical advantage. Prices are trending higher on the daily bar chart. The next upside price objective for the hog bulls is to close April 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 $92.50. First resistance is seen at the contract high of $97.55 and then at $99.00. First support is seen at $98.00 and then at $97.00.
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 should have all your soymeal needs covered through March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $2.725 to $239.525, near mid-range and hit a three-month high. March feeder cattle gained $6.075 to $366.35, near mid-range and hit a three-month high.
Fundamental analysis: The live and feeder cattle futures markets saw solid gains and new for-the-move highs today on technical buying amid bullish charts, and on confirmation from last Friday’s semiannual U.S. cattle inventory report that the U.S. cattle herd is the smallest in 75 years.
USDA today reported last week’s average cash cattle trade at $239.44. That’s up $4.74 from the week prior’s average cash trade at $234.70. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $2.14 at $367.70, while Select-grade gained $2.35 to $364.29. Movement at midday was light at 33 loads. The Choice-Select spread at midday today was plus $3.41.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage and gained fresh power today to keep price uptrends alive on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above resistance at the contract high of $250.925. The next downside technical objective for the bears is closing prices below solid technical support at the January low of $231.275. First resistance is seen at $242.00 and then at $243.00. First support is seen at today’s low of $238.00 and then at $236.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at the contract high of $378.60. The next downside price objective for the bears is to close prices below solid technical support at $353.00. First resistance is seen at $370.00 and then at $372.50. First support is seen at today’s low of $363.15 and then at $360.00.
What to do: Cover corn-for-feed needs through March in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.