Hogs
Price action: April lean hog futures fell 15 cents to $95.575, nearer the daily low.
Fundamental analysis: Lean hog futures today saw mild selling pressure amid keener risk aversion in the general marketplace. Firming cash hog prices did limit the downside in hog futures today.
The latest CME lean hog index is up 32 cents at $89.44. Tuesday’s projected cash index price is up another 25 cents at $89.69. The national direct five-day rolling average cash hog price quote today is $68.47. The noon report today showed pork cutout value up $1.86 to $99.63, led by gains in bellies and ribs. Movement at midday was 165.39 loads.
Technical analysis: April lean hog futures bulls have the near-term technical advantage as they have started a new price uptrend on the daily chart. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at the contract high of $99.80. The next downside price objective for the bears is closing prices below solid technical support at the February low of $91.125. First resistance is seen at last week’s high of $96.65 and then at $97.50. First support is seen at $94.00 and then at $93.00.
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 March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose 87 1/2 cents to $233.10, near the daily high and hit a two-month low early on. March feeder cattle gained $1.85 to $357.275, near the session high and hit a two-month low early on.
Fundamental analysis: The cattle futures markets early today saw follow-through selling pressure from late last week’s downdrafts. However, prices rebounded late and the high-range daily closes today begin to suggest the bears may be near-term exhausted. A risk-off trading day in the general marketplace today, amid the U.S.-Iran war, also kept the cattle market bulls timid. Solidly lower cash cattle trading last week was also a negative for futures today.
USDA at midday today reported last week’s cash trading averaged $242.71. That’s down $4.20 from the prior week’s average. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up 65 cents at $380.49, while Select-grade rose $2.17 to $376.48. Movement at midday was light at 30 loads. The Choice-Select spread at midday today was plus $4.01.
Technical analysis: The live and feeder cattle futures have seen price uptrends on the daily bar charts negated to produce serious near-term technical damage. The next upside price objective for the live cattle bulls is to close April futures above resistance at $238.00. The next downside technical objective for the bears is closing prices below solid technical support at 225.00. First resistance is seen at $234.00 and then at $235.00. First support is seen at $230.00 and then at today’s low of $228.525.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance $370.00. The next downside price objective for the bears is to close prices below solid technical support at $340.00. First resistance is seen at $358.00 and then at $360.00. First support is seen at $354.00 and then at today’s low of $350.30.
What to do: Cover corn-for-feed needs through March 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 March as well. Be prepared to make additional purchases if value prices continue.