Hogs
Price action: August lean hog futures fell $0.375 to $101.275, near the daily low and hit a seven-week high early on.
Fundamental analysis: The lean hog futures market saw a pause today following recent good gains that have been fueled by chart-based speculators. Bullish futures traders have been encouraged by recently rising cash hog prices. The USDA noon pork report today showed cutout value was down $0.73 at $103.68, led by losses in bellies. Movement at midday was 152.84 loads. The latest CME lean hog index is up 55 cents to $95.65. Tuesday’s projected CME index price is up 51 cents at $96.16. The national direct five-day rolling average cash hog price quote for today was $99.80.
Technical analysis: August lean hog futures still see a price uptrend in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $104.00. The next downside price objective for the bears is closing prices below solid technical support at $96.325. First resistance is seen at today’s high of $102.20 and then at $103.00. First support is seen at $100.00 and then at $99.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle rose $2.10 to $226.525, nearer the daily high. August feeder cattle gained $6.05 to $352.00, near the daily high.
Fundamental analysis: The live and feeder cattle futures markets today saw solid short covering and perceived bargain buying by the speculators following recent strong losses.
USDA at midday today reported average cash cattle trading last week at $238.28 down nearly $10 from the week-prior’s average of $248.01. The noon report today showed higher boxed beef prices, with Choice grade up $2.51 at $369.32 and Select grade up $0.76 at $356.05. Movement at midday was 44 loads. The Choice-Select spread is presently plus $13.27.
Technical analysis: Live and feeder cattle futures markets still see price downtrends in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $222.275. First resistance is seen at $228.00 and then at $230.50. First support is seen at today’s low of $223.675 and then at $222.275.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $360.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $352.60 and then at $355.00. First support is seen at $349.00 and then at today’s low of $345.05.
What to do: You have corn-for-feed and soymeal needs covered through July 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 July in the cash market. Be prepared to make purchases if value prices continue.