Hogs
Price action: October lean hog futures rose $0.125 to $83.775, nearer the daily low and hit a four-week high early on.
Fundamental analysis: The lean hog futures market saw some mild profit-taking early on and then chart consolidation later in the session, after recent good gains that suggest the futures market has bottomed out. The cash hog market continues to trend down, overall. The latest CME lean hog index down 28 cents to $90.58. Thursday’s projected CME index price is up 27 cents at $90.85. The national direct five-day rolling average cash hog price quote for today is $89.67. The USDA’s noon pork report today showed cutout value was down $1.79 at $96.11. Movement at midday was 147.66 loads.
Technical analysis: October lean hog futures bulls have momentum after recent chart action suggests a near-term market bottom is in place. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $86.00. 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 $84.90 and then at $86.00. First support is seen at this week’s low of $81.975 and then at $81.00.
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 fell $1.90 to $210.175, near the daily low and closed at a nine-month low close. November feeder cattle lost $0.175 to $308.35, nearer the daily low.
Fundamental analysis: October live cattle saw solid technical selling pressure today as prices remain firmly trapped in a downtrend on the daily bar chart. Very light cash cattle trading at lower money at mid-week also helped to pressure the futures market today. However, live cattle futures continue to trade at significant discounts to the cash cattle market, which could limit the downside in futures.
In other news, the Agua Prieta cattle crossing from Sonora into the United States is expected to reopen on September 8 after exports were temporarily suspended for repairs, the Sonora Regional Livestock Union said on Tuesday. World Weather Inc. today said livestock stress “has been horrific in the southern Plains recently with persistent excessive heat and no rain. Grazing grass is quite limited and animal weight grains have been a struggle along with some livestock health issues.” The hot weather was briefly relieved late last week, but temperatures became oppressively hot again during the weekend. Limited rain and very warm to hot temperatures will prevail for another ten days, leaving animals stressed.
USDA at midday today reported very light negotiated cash cattle trading so far this week, at $217.88 for steers and at $218.00 for heifers. The agency said cash cattle trade last week averaged $219.25. The noon report today showed mixed boxed beef prices, with Choice grade up $2.30 at $382.05 and Select grade down $2.81 at $357.64. Movement at midday was 53 loads. The Choice-Select spread is presently plus $24.41.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $220.00. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at this week’s high of $213.50 and then at $215.00. First support is seen at the August low of $209.525 and then at $208.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $320.00. The next downside price objective for the bears is to close prices below solid technical support at $300.00. First resistance is seen at this week’s high of $312.65 and then at $314.45. First support is seen at the August low of $304.15 and then at $300.00.
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.