Hogs
Price action: August lean hogs rose 45 cents to $107.225, nearer the session high.
Fundamental analysis: The lean hog futures market is pausing this week, which slightly favors the bullish camp. However, buying interest has been limited by cash hog and fresh pork market fundamentals that have shown weakness recently. The latest CME lean hog index is down another $1.00 to $107.33 as of July 7. Thursday’s projected cash price is down 29 cents at $107.04. The national direct five-day rolling average cash hog price quote today is $111.12. The noon report today showed pork cutout value up $1.38 to 113.39, led by gains in bellies. Pork packer margins are firmly in the red, suggesting the decline from seasonal highs in the cash and product markets will continue as hog slaughter numbers are likely to gradually start to build.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage but a price uptrend on the daily bar chart has been negated. The next upside price objective for the hog bulls is to close August prices above solid chart resistance at the contract high of $113.375. The next downside price objective for the bears is closing prices below solid technical support at $102.00. First resistance is seen at this week’s high of $107.825 and then at $109.00. First support is seen at this week’s low of $105.50 and then at $105.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.
Cattle
Price action: August live cattle fell 20 cents to $219.775, nearer the daily low and hit a contract/record high early on today. August feeder cattle rose $1.35 to $320.475, nearer the session high and hit a contract/record high.
Fundamental analysis: The cattle futures markets continue their record-setting bull market runs, with no early technical clues to suggest that market tops are close at hand. Selling interest in live cattle futures remains limited due to big discounts futures hold to the cash cattle market.
Rallying cattle futures prices and strong beef packer margins are raising hopes cash cattle prices may be steady at worst this week following three straight weeks of decline. USDA today reported very light cash cattle trade has occurred so far this week, with steers averaging $235.00 and heifers averaging $225.00. Last week’s average cash cattle trade was $229.43. The noon report today showed wholesale boxed beef prices fell, with Choice grade down $3.55 to $389.49 and Select grade down $3.52 at $374.94. Movement at midday was decent at 70 loads. The Choice-Select spread is presently $14.55.
Technical analysis: Live and feeder cattle futures bulls have the solid overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at $225.00. The next downside technical objective for the bears is closing prices below solid technical support at $212.50. First resistance is seen at today’s contract high of $220.80 and then at $222.00. First support is seen at $216.00 and then at Tuesday’s low of $216.075.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $325.00. The next downside price objective for the bears is to close prices below solid technical support at $309.00. First resistance is seen at today’s contract high of $321.00 and then at $322.00. First support is seen at $317.00 and then at $315.00.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.