Hogs
Price action: April lean hog futures rose 40 cents to $95.20, nearer the daily high and hit a two-week high.
Fundamental analysis: Lean hog futures today saw more technical buying and perceived bargain hunting following the mid-February price downdraft. Bulls have re-established a price uptrend on the daily chart.
The latest CME lean hog index is up 18 cents at $88.35. Thursday’s projected cash index price is up another 36 cents at $88.71. The national direct five-day rolling average cash hog price quote today is $67.13. The noon report today showed pork cutout value up $1.50 at $98.45, led by gains in ribs, picnics and bellies. Movement at midday was 189.01 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 today’s high of $96.575 and then at $97.50. First support is seen at $96.00 and then at $95.00.
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 $1.175 to $240.275, near mid-range. March feeder cattle gained $1.20 to $366.30, near mid-range.
Fundamental analysis: The cattle futures markets bulls today did what they’ve done several times the past few months: show resilience and strength on price pullbacks, to keep price uptrends alive and keep their technical edge. Traders are awaiting cash cattle trade to develop this week, with notions that packers won’t be willing to pay higher money for animals because their cutting margins are deep in the red. USDA at midday today reported no cash cattle trading yet this week. The agency Monday reported cash cattle trading last week averaged $246.91, up $1.29 from the week prior. The noon report today showed wholesale boxed beef cutout values firmer again. Choice-grade was up $1.92 at $379.35, while Select-grade rose 75 cents to $366.76. Movement at midday was 59 loads. The Choice-Select spread at midday today was plus $12.59.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage and gained more strength today amid price uptrends still in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above resistance at the contract high of $250.925. The next downside technical objective for the bears is closing prices below solid technical support at the February low of $234.55. First resistance is seen at this week’s high of $242.625 and then at the February high of $244.575. First support is seen at $240.00 and then at this week’s low of $238.25.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at the contract high of $378.60. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen at this week’s high of $369.35 and then at last week’s high of $372.25. First support is seen at today’s low of $364.375 and then at this week’s low of $361.725.
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.