Hogs
Price action: June lean hog futures fell $0.60 to $103.125, nearer the session low and hit a more-than-three-month low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure today amid a downtrend in place on the daily bar chart.
The latest CME lean hog index is up 1 cent at $90.28. Tuesday’s projected cash index price is down another penny at $90.27. The national direct five-day rolling average cash hog price quote today is $68.45. The noon report today showed pork cutout value up $1.11 at $99.81, led by gains in ribs and bellies. Movement at midday was 125.67 loads.
Technical analysis: April lean hog futures bears have the overall near-term technical advantage and gained more power today. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at $104.00 and then at $105.00. First support is seen at $102.00 and then at $101.00.
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 April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $0.675 to $248.525, near mid-range. May feeder cattle gained $0.475 to $372.825, nearer the daily high and hit a 5.5-month high.
Fundamental analysis: The cattle futures markets today saw a pause and some mild profit taking after June live cattle hit a contract high last Friday. A bit more risk aversion in the general marketplace early this week also favored the cattle market bears.
USDA at midday today reported cash cattle trading last week averaged $248.38. That’s up $3.42 from the prior week’s average of $244.96. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up $1.07 at $381.97, while Select-grade was up $3.17 at $384.51. Movement at midday was light at 31 loads. The Choice-Select spread at midday today was minus $2.54.
Technical analysis: Cattle futures markets bulls are enjoying solid price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at $252.50. The next downside technical objective for the bears is closing prices below solid technical support at $239.00. First resistance is seen at the contract high of $249.95 and then at $251.00. First support is seen at $247.00 and then at $245.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $376.625. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen at $375.00 and then at this week’s high of $376.625. First support is seen at $370.00 and then at $367.50.
What to do: Cover corn-for-feed needs through April 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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.