Hogs
Price action: February lean hog futures rose 20 cents to $84.625, nearer the session high.
Fundamental analysis: Lean hog futures today saw a mild upside correction after two days in a row of downside pressure. A weakening cash hog market and CME lean hog index have limited buying interest in futures just recently.
The latest CME lean hog index is down 25 cents to $80.60. Wednesday’s projected cash index price is down another 10 cents at $80.50. Today’s national direct 5-day rolling average cash hog price quote is $68.56. The noon report today showed pork cutout value down 97 cents at $92.13, led by losses in loins and picnics. Movement at midday was good at 236.24 loads.
Technical analysis: February lean hog futures are fading as a price uptrend on the daily bar chart has been negated. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at the January high of $86.50. The next downside price objective for the bears is closing prices below solid technical support at $82.00. First resistance is seen at this week’s high of $85.35 and then at $86.00. First support is seen at this week’s low of $83.775 and then at last week’s low of $82.50.
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 March in the cash market. You should also have corn-for-feed needs purchased through February. Be prepared to make additional purchases.
Cattle
Price action: February live cattle rose $2.00 to $237.25, nearer the session high and hit a 2.5-month high. March feeder cattle gained $5.95 to $362.175, near the session high and hit a 2.5-month high.
Fundamental analysis: The cattle futures markets today saw good buying interest today amid bullish technical charts and bullish fundamentals, to suggest more price upside is likely in the near term.
USDA today reported very light cash cattle trading so far this week, averaging $233.00. USDA Monday reported cash cattle trading last week averaged $231.86, which is up 18 cents from the prior week. The noon report today showed wholesale boxed beef cutout values higher, with Select grade posting a rare higher price than Choice. Choice-grade was up 91 cents at $358.02, while Select-grade gained 99 cents to $359.04. Movement at midday was good at 93 loads. The Choice-Select spread at midday today narrowed to minus $1.02.
Technical analysis: The live and feeder cattle futures bulls have the firm overall near-term technical advantage and gained more power today. Price uptrends are in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at $240.375, which is the top of a downside price gap on the daily bar chart. The next downside technical objective for the bears is closing prices below solid technical support at $230.00. First resistance is seen at $238.00 and then at $239.00. First support is seen at today’s low of $235.15 and then at this week’s low of $233.95.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $345.00. First resistance is seen at $362.50 and then at $365.00. First support is seen at today’s low of $356.175 and then at this week’s low of $353.65.
What to do: Cover corn-for-feed needs through February 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 February as well. Be prepared to make additional purchases if value prices continue.