Hogs
Price action: December lean hogs fell 62 1/2 cents to $81.775, near the daily low and hit a two-month low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure today. Bearish technicals and steadily declining cash hog market prices are prompting selling in hog futures. Wobbly cattle futures markets this week are also bearish for hog futures.
The latest CME lean hog index is down another 80 cents at $94.18. Friday’s projected cash hog index is down another 55 cents at $93.63. Today’s national direct 5-day rolling average cash hog price quote is $89.17. The noon report today showed pork cutout value down 91 cents to $98.84. Movement at midday was decent at 195.99 loads.
Technical analysis: December lean hog futures bears have the firm 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 December futures prices above solid chart resistance at $84.00. The next downside price objective for the bears is closing prices below solid technical support at $80.00. First resistance is seen at today’s high of $83.00 and then at this week’s high of $84.05. First support is seen at $81.00 and then at $80.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through December in the cash market. For corn, you now have all needs through November covered in the cash market.
Cattle
Price action: December live cattle rose $1.35 to $241.175, nearer the session low. January feeder cattle fell $3.60 to $357.425, nearer the daily low and hit a three-week low.
Fundamental analysis: The live cattle futures market today saw a corrective bounce from Wednesday’s strong selling pressure. Feeder cattle futures saw follow-through selling pressure from Wednesday’s limit-down trade. Recent price action in the cattle futures markets suggests the bulls are running out of gas, especially feeder cattle futures.
Cattle futures traders are digesting the latest Trump administration news on U.S. beef. The administration plans to quadruple Argentine beef imports into the U.S. to 80,000 MT to try to reduce beef prices at the meat counter. USDA issued a press release Wednesday afternoon, announcing a “suite of actions” to strengthen the American beef industry, reinforcing and prioritizing the American rancher’s critical role in the national security of the United States.
USDA at midday today reported more active cash cattle trade, averaging $239.34 for steers and averaging $239.09 for heifers. USDA said last week’s average cash cattle averaged $239.82. The noon report today showed wholesale boxed beef cutout values firmer, with Choice-grade up $1.83 to $372.48, while Select rose 50 cents to $354.11. Movement at midday was decent at 75 loads. The Choice-Select spread is presently $18.37.
Technical analysis: The live and feeder cattle futures bulls still have the overall near-term technical advantage but have wobbled this week, especially feeders, to begin to suggest market tops are in place. The next upside price objective for the live cattle bulls is to close December futures above resistance at the contract high of $248.30. The next downside technical objective for the bears is closing prices below solid technical support at $235.00. First resistance is seen at $244.00 and then at $245.00. First support is seen at $240.00 and then at this week’s low of $238.525.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $376.75, which is the top of a downside price gap on the daily chart. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $363.80 and then at $366.00. First support is seen at today’s low of $356.875 and then at $355.00.
What to do: NEW ADVICE - Cover your corn-for-feed needs in the cash market through November.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through December. For corn, you have all needs through November covered in the cash market. Be prepared to make additional purchases if value prices continue.