Hogs
Price action: August lean hog futures fell $2.425 to $100.675, near the daily low and hit a two-week low.
Fundamental analysis: The lean hog futures market saw heavy profit-taking pressure today after prices hit a nine-week high on Tuesday. A price uptrend on the daily bar chart is now in jeopardy. Steadily rising cash hog prices will limit selling interest in futures in the near term. The latest CME lean hog index is up 12 cents to $98.35. Thursday’s projected CME index price is up another 10 cents at $98.45. The national direct five-day rolling average cash hog price quote for today is $101.08. The USDA’s noon pork report today showed cutout value was down $1.34 at $105.57, led by losses in bellies. Movement at midday was 157.85 loads.
Technical analysis: August lean hog futures see a price uptrend firmly in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $106.00. The next downside price objective for the bears is closing prices below solid technical support at $98.00. First resistance is seen at $102.00 and then at this week’s high of $103.35. First support is seen at $100.00 and then at $99.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all 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 rose $0.425 to $227.90, nearer the daily low and hit a two-week high early on. August feeder cattle gained $1.20 to $344.275, near mid-range.
Fundamental analysis: The cattle futures markets today saw more corrective bounces from their recent lows. For August live cattle, technical odds are increasing that a near-term market bottom is in place. Livestock stress continues in the Plains states and will stay elevated because of the oppressive heat. USDA at midday Tuesday reported very light cash cattle trade taking place so far this week, with steers averaging $229.00 and heifers $228.00. The agency Monday reported cash cattle trading last week averaged $230.48, which is down $7.80 from the week prior. The noon report today showed mixed boxed beef prices, with Choice grade down $1.35 at $364.51 and Select grade up $1.75 at $345.27. Movement at midday was decent at 77 loads. The Choice-Select spread is presently plus $19.24.
Technical analysis: Live cattle futures today saw a price downtrend on the daily bar chart negated. Feeders are still in a downtrend. The next upside price objective for the live cattle bulls is to close August futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the July low of $221.70. First resistance is seen at today’s high of $230.00 and then at $232.00. First support is seen at Tuesday’s low of $225.50 and then at this week’s low of $222.75.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $353.475. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $346.50 and then at $348.95. First support is seen at $340.00 and then at this week’s low of $337.00.
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.