Hogs
Price action: August lean hogs rose 40 cents to $107.75, near mid-range and hit a two-week high.
Fundamental analysis: The hog futures market bulls have upside momentum as prices continue a strong rebound from the mid-July low. That’s inviting speculators to be more active players on the long side of the market. Improving technical charts and record-high cattle futures prices are also helping boost hog futures prices.
Cash hog and pork market fundamentals are also overall price-friendly. The latest CME lean hog index is up another 27 cents to $108.20. Wednesday cash index price is projected up 39 cents to $108.59. The national direct five-day rolling average cash hog price quote today is $111.56. The noon report today showed pork cutout value down 35 cents to $119.17, with butts leading losses. Movement at midday was decent at 191.39 loads.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage and have momentum. The next upside price objective for the hog bulls is to close August prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at $105.00. First resistance is seen at $109.00 and then at $110.00. First support is seen at this week’s low of $105.875 and then at $105.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
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.
Cattle
Price action: August live cattle fell 25 cents to $224.975, near mid-range and hit another contract/record high early on. August feeder cattle rose 67 1/2 cents to $328.275, nearer the daily high and also hit a contract/record high.
Fundamental analysis: Selling interest in the cattle futures markets remains scarce, even with prices at record highs. Solid cash and beef market fundamentals, as well as bullish technical charts, are keeping the bulls in command.
USDA Monday reported the average cash cattle trading price for last week was $237.78, up 57 cents from the week prior’s average. Look for near-steady or possibly even higher cash cattle prices when more active trading commences this later week. However, packers will again be reluctant to bid up for cattle supplies due to cutting margins that are deeply in the red. The noon report today showed wholesale boxed beef values mixed, with Choice-grade up $1.23 to $373.30, while Select fell $2.32 to $347.73. Movement at midday was solid at 97 loads. The Choice-Select spread is presently $25.57.
Cattle traders get some fresh supply data later this week with Friday afternoon’s monthly USDA Cattle-on-Feed Report.
Technical analysis: Live and feeder cattle futures bulls have the solid overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at $230.00. The next downside technical objective for the bears is closing prices below solid technical support at $217.50. First resistance is seen at the contract high of $225.725 and then at $227.00. First support is seen at this week’s low of $222.85 and then at $221.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $335.00. The next downside price objective for the bears is to close prices below solid technical support at $314.00. First resistance is seen at the contract high of $329.075 and then at $330.00. First support is seen at this week’s low of $323.45 and then at $320.00.
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.