Hogs
Price action: February lean hogs rose 12 1/2 cents to $82.40, nearer the daily high and closed at a four-week high close.
Fundamental analysis: Lean hog futures prices paused today following recent good gains. Traders are thinking the cash hog market has put in a seasonal bottom. Also, lean hog futures prices are starting to trend up on the daily bar chart.
The Philippines has temporarily banned imports of pig and pork products from Spain and Taiwan following outbreaks of African swine fever in both locations, according to Manila’s agriculture ministry. Lean hog futures traders will continue to closely monitor this situation and its implications for better U.S. pork exports.
The latest CME lean hog index is down 2 cents to $81.81. Tuesday’s projected cash index price is up 3 cents at $81.84. Today’s national direct 5-day rolling average cash hog price quote is $70.42. The noon report today showed pork cutout value down 25 cents to $96.14, led by losses in picnics. Movement at midday was decent at 197.23 loads.
Technical analysis: February lean hog futures bulls now have the slight overall near-term technical advantage as prices are trending up on the daily 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 the November low of $77.125. First resistance is seen at last week’s high of $83.025 and then at $83.60. First support is seen at $82.00 and then at last week’s low of $79.60.
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 47 1/2 cents to $226.675, near mid-range and hit a four-week high early on. January feeder cattle lost $3.40 to $335.65, near mid-range.
Fundamental analysis: The live and feeder cattle futures markets saw some pausing and modest downside price corrections to start the trading week, following last week’s strong gains that firmly suggest near-term market bottoms are in place. The much-improved near-term technical postures for live and feeder cattle futures markets will likely continue to invite the chart-based speculators to the buy sides.
USDA at midday today reported the average cash cattle trade for last week at $221.21, which is up $9.68 from the prior week’s average of $211.53. The noon report today showed wholesale boxed beef cutout values just slightly lower, with Choice-grade down 1 cent at $361.19, while Select-grade fell 5 cents to $347.34. Movement at midday was light at 67 loads. The Choice-Select spread is presently $13.85.
Technical analysis: The live and feeder cattle futures bulls have the near-term technical advantage as prices are now trending up on the daily bar charts, to firmly suggest near-term market bottoms are in place. The next upside price objective for the live cattle bulls is to close February futures above resistance at $233.425, 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 $215.00. First resistance is seen at $229.00 and then at $230.00. First support is seen at $225.00 and then at $222.50.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $348.175, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is to close prices below solid technical support at $315.00. First resistance is seen at last week’s high of $340.075 and then at $343.00. First support is seen at today’s low of $333.375 and then at $330.00.
What to do: You are hand-to-mouth for corn-for-feed needs. 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 December. You are hand-to-mouth for corn-for-feed needs. Be prepared to make additional purchases. Be prepared to make additional purchases if value prices continue.