Hogs
Price action: October lean hog futures rose $0.60 to $79.875, near the daily high.
Fundamental analysis: The lean hog futures market saw more short covering today, following the recent steep price downdraft that saw prices hit a 15-month low last week. The near-term chart posture remains bearish. A still-weakening cash hog market also is bearish for lean hog futures.
The latest CME lean hog index is down $0.50 at $82.92. Thursday’s projected CME index price is down another 45 cents at $82.47. The national direct five-day rolling average cash hog price quote for today is $79.98. The USDA’s noon pork report today showed cutout value was down $0.81 at $87.18, led by losses in picnics and bellies. Movement at midday was 169.23 loads.
Hog trades are awaiting Thursday’s quarterly hogs and pigs report, which is expected to show a smaller U.S. hog inventory.
Technical analysis: October lean hog futures still see the technical posture as bearish. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $81.475, which is the top of a downside price gap on the daily bar chart.. The next downside price objective for the bears is closing prices below solid technical support at $75.00. First resistance is seen at $80.00 and then at $81.375. First support is seen at last week’s low of $77.975 and then at $77.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle rose $2.15 to $220.925, near the daily high. November feeder cattle gained $6.30 to $329.50, near the session high.
Fundamental analysis: The live and feeder cattle futures markets today rallied following Tuesday’s corrective pullbacks. Both markets still see their prices within last week’s trading ranges. The direction in which prices push above or below those ranges will likely be the direction of the next trending price move.
USDA at midday today reported very light cash trading this week, averaging $222.00. The agency on Monday said cash cattle trading last week averaged $221.87, down 95 cents from $222.82 the week prior. The noon report today showed losses in boxed beef prices, with Choice grade down $0.39 at $378.50 and Select grade off $4.58 at $353.27. Movement at midday was 57 loads. The Choice-Select spread is presently plus $25.23.
Technical analysis: Cattle futures prices gapped higher on the daily bar charts Monday to give the bulls some technical momentum. Bullish head-and-shoulders bottom reversal patterns may also be forming on the daily charts for October live cattle and November feeders. The next upside price objective for the live cattle bulls is to close October futures above resistance at the August high of $230.325. The next downside technical objective for the bears is closing prices below solid technical support at $214.00. First resistance is seen at this week’s high of $221.475 and then at last week’s high of $222.825. First support is seen at this week’s low of $218.025 and then at $216.75.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at the September high of $333.325. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at $330.00 and then at $333.325. First support is seen at this week’s low of $321.90 and then at $320.475.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.