Hogs
Price action: August lean hog futures rose $2.725 to $99.65, near the daily high and closed at six-week high close.
Fundamental analysis: The lean hog futures market today saw a good corrective bounce to keep the price uptrend alive on the daily bar chart and to provide the bulls fresh technical momentum.
The USDA noon pork report today showed cutout value was up $1.07 at $98.98, led by gains in bellies. Movement at midday was 164.87 loads. The latest CME lean hog index is up 11 cents to $91.66. Thursday’s projected CME index price is up 32 cents at $91.98. The national direct five-day rolling average cash hog price quote for today is $96.64.
Technical analysis: August lean hog futures see a price uptrend still in place 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 $100.00. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $95.425. First resistance is seen at $100.00 and then at $101.00. First support is seen at $97.50 and then at this week’s low of $96.325.
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 lost $0.80 to $237.625, nearer the daily high and hit a five-week low. August feeder cattle rose $1.40 to $362.05, nearer the daily high.
Fundamental analysis: The live and feeder cattle futures markets saw more technically based short selling and weak long liquidation today as prices are trending down on the daily bar chart. A “risk-off” day in the general marketplace today also worked against the cattle market bulls. However, today’s high-range daily closes do hint the bears may be exhausted.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is reporting 32 total New World screwworm detected cases in the U.S. the past 30 days and all still in Texas and New Mexico. There are 18 active cases, all still in Texas.
Livestock stress is likely this week and into the weekend due to hotter temperatures in the Plains states.
USDA at midday today reported still no cash cattle trading taking place so far this week. The agency on Monday said cash cattle trading last week averaged $255.12, which is down $4.22 from the week prior’s average price. The noon report today showed lower boxed beef prices, with Choice grade down $3.56 at $382.21 and Select grade down $2.99 at $362.90. Movement at midday was decent at 75 loads. The Choice-Select spread is presently plus $19.31.
Technical analysis: Live and feeder cattle futures markets see price downtrends in place on their daily bar charts, which suggests the path of least resistance for prices will remain sideways to lower. The next upside price objective for the live cattle bulls is to close August futures above resistance at $247.50. The next downside technical objective for the bears is closing prices below solid technical support at the June low of $233.975. First resistance is seen at this week’s high of $240.55 and then at $243.00. First support is seen at $233.975 and then at $232.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at this week’s high of $363.125 and then at $365.00. First support is seen at today’s low of $353.70 and then at $350.00.
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.