Hogs
Price action: February lean hogs fell 17 1/2 cents to $79.00, nearer the session low.
Fundamental analysis: Lean hog futures market today paused in the existing price downtrend after posting short-covering gains Monday. Steadily declining cash hog prices will continue to limit the upside in futures, until the cash market stabilizes.
The latest CME lean hog index is down another $1.20 at $83.61. Wednesday’s projected cash index price is down another 80 cents at $82.81. Today’s national direct 5-day rolling average cash hog price quote is $70.92. The noon report today showed pork cutout value down 56 cents to $93.22, led by losses in loins and bellies. Movement at midday was decent at 206.21 loads.
Weekly USDA export sales for the week of Oct. 9 showed U.S. pork sales of 31,000 MT. Net sales of 1,710 MT to China were reported, with exports to China of 2,609 MT.
Technical analysis: February lean hog futures bears still have the firm overall near-term technical advantage. A price downtrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at the November high of $83.60. The next downside price objective for the bears is closing prices below solid technical support at $75.00. First resistance is seen at $80.00 and then at $81.00. First support is seen at $78.00 and then at last week’s low of $77.125.
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 December in the cash market. For corn, you now have all needs through November covered in the cash market.
Cattle
Price action: February live cattle fell 20 cents to $207.325, near mid-range and hit a six-month low early on. January feeder cattle gained $2.10 to $307.075, nearer the session high and hit a nearly five-month low early on.
Fundamental analysis: The live cattle futures market today saw a pause and feeder cattle futures saw a corrective bounce after both closed locked limit down on Monday. Buying interest was limited by reports of cash cattle trading early this week at sharply lower levels. USDA at midday today reported light cash cattle trading has occurred this week, with steers averaging $208.00 and heifers $207.32. Cash cattle trading last week averaged $217.41, said USDA, which was $7.65 below the prior week’s average of $225.06.
The noon report today showed wholesale boxed beef cutout values higher, with Choice-grade up $1.56 at $372.05, while Select-grade gained $3.46 to $358.97. Movement at midday was decent at 74 loads. The Choice-Select spread is presently $13.08.
USDA today reported weekly U.S. beef export sales of 13,600 MT for the week of Oct. 9.
Technical analysis: The live and feeder cattle futures bears have the solid overall near-term technical advantage. Prices are in downtrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at last week’s high of $223.05. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at $210.00 and then at $215.00. First support is seen at today’s low of $204.325 and then at $200.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at last week’s high of $328.075. The next downside price objective for the bears is to close prices below solid technical support at $290.00. First resistance is seen at $312.00 and then at $315.00. First support is seen at today’s low of $299.525 and then at $295.00.
What to do: Cover your corn-for-feed needs in the cash market through November.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through December. For corn, you have all needs through November covered in the cash market. Be prepared to make additional purchases if value prices continue.