Hogs
Price action: August lean hog futures fell $0.75 to $97.60, nearer the daily low and hit a six-month low.
Fundamental analysis: The lean hog futures market saw continued technical selling pressure today. Near-term charts remain firmly bearish. Prices are still in a steep downtrend on the daily bar chart.
The latest CME lean hog index is up 48 cents at $91.40. Tuesday’s projected cash index price is down 4 cents at $91.36. The national direct five-day rolling average cash hog price quote today is $94.17. The noon report today showed pork cutout value up $1.24 at $100.69. Movement at midday was good at 222.25 loads.
Technical analysis: August lean hog futures bears have the solid overall near-term technical advantage. Prices are in a steep downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $102.50. The next downside price objective for the bears is closing prices below solid technical support at the November low of $93.675. First resistance is seen at today’s high of $94.80 and then at $97.50. First support is seen at $97.00 and then at $96.00.
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 and corn-for-feed needs covered in the cash market through May. Be prepared to make additional purchases.
Cattle
Price action: August live cattle rose $1.55 to $240.60, nearer the daily high. August feeder cattle gained $3.125 to $351.55, nearer the daily high.
Fundamental analysis: The cattle futures markets today saw short covering and perceived bargain hunting, with feeders leading the way. New World Screwworm has been found in a young sheep in Mexico within 31 miles of the U.S. border, USDA reported on Friday.
USDA at midday today reported cash cattle trading last week averaged $256.86. That’s down $3.63 from last week’s average. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $2.63 at $394.10, while Select-grade gained $0.66 to $383.84. Movement at midday was light at 34 loads. The Choice-Select spread at midday today was plus $10.26.
Technical analysis: Live cattle futures bulls still have the overall near-term technical advantage but a fledgling downtrend is in place on the daily bar chart. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $251.65. The next downside technical objective for the bears is closing prices below solid technical support at $230.00. First resistance is seen at last week’s high of $243.875 and then at $245.00. First support is seen at the May low of $236.825 and then at $235.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $366.125. The next downside price objective for the bears is to close prices below solid technical support at the May low of $344.275. First resistance is seen at today’s high of $353.75 and then at $356.525. First support is seen at today’s low of $347.45 and then at $344.475.
What to do: Cover corn-for-feed and soymeal needs through May 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 and soymeal for feed needs covered in the cash market through May. Be prepared to make additional purchases if value prices continue.