Hogs
Price action: April lean hog futures rose 10 cents to $96.825, near mid-range and hit another contract high early on.
Fundamental analysis: Lean hog futures today paused, with selling interest limited by solid technicals and rising cash hog and CME lean hog index prices. The latest CME lean hog index is up 39 cents at $84.01. Wednesday’s projected cash index price is up another 42 cents at $84.43. The national direct five-day rolling average cash hog price quote today is $60.71. The noon report today showed pork cutout value up 62 cents at $97.88, led by gains in bellies. Movement at midday was 133.63 loads.
Technical analysis: April lean hog futures bulls have the solid overall near-term technical advantage. Prices are trending higher on the daily bar chart. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at $100.00. The next downside price objective for the bears is closing prices below solid technical support at $92.50. First resistance is seen at today’s contract high of $97.55 and then at $98.00. First support is seen at this week’s low of $95.725 and then at $95.00.
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: April live cattle fell 60 cents to $237.40, near mid-range. March feeder cattle fell 60 cents to $362.00, nearer the session high.
Fundamental analysis: The live and feeder cattle futures markets paused today. Selling interest was limited by the lingering effects of last Friday afternoon’s monthly USDA cattle-on-feed report that leaned overall price-friendly. USDA today reported very light cash cattle trading activity so far this week, averaging $234.00. USDA Monday reported average cash cattle trading last week at $234.70, up $2.20 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was up 37 cents at $369.27, while Select-grade lost $2.55 to $364.57. Movement at midday was light at 59 loads. The Choice-Select spread at midday today was plus $4.70.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage but price uptrends have at least temporarily stalled out. The next upside price objective for the live cattle bulls is to close April futures above resistance at $240.00. The next downside technical objective for the bears is closing prices below solid technical support at the January low of $231.275. First resistance is seen at the January high of $239.05 and then at $240.00. First support is seen at $235.00 and then at last week’s low of $232.65.
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 $350.00. First resistance is seen at the January high of $365.00 and then at $367.50. First support is seen at today’s low of $359.975 and then at $357.50.
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.