Hogs
Price action: October lean hog futures fell $1.175 to $83.675, nearer the daily low.
Fundamental analysis: The lean hog futures market saw more profit-taking pressure and weak long liquidation today. The cash hog market rally is also stalling out. The latest CME lean hog index is down 21 cents to $98.23. Tuesday’s projected CME index price is down 55 cents at $97.68. The national direct five-day rolling average cash hog price quote for today is $101.14. The USDA’s noon pork report today showed cutout value was up $2.44 at $102.45, led by gains in picnics and bellies. Movement at midday was 161.02 loads.
Technical analysis: October lean hog futures see a potential bearish pennant pattern forming on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at the July high of $89.55. The next downside price objective for the bears is closing prices below solid technical support at the June low of $79.775. First resistance is seen at today’s high of $84.90 and then at $86.00. First support is seen at last week’s low of $82.10 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 July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $0.525 to $226.725, nearer the daily low and hit a three-week high early on. September feeder cattle lost $1.225 to $342.55, nearer the daily low but hit a two-week high early on.
Fundamental analysis: The cattle futures markets today saw mild corrective buying and perceived bargain hunting early on, but lost those gains by the close. Still, for October live cattle and September feeders, technical odds have improved that near-term market bottoms are in place. Price downtrends on the daily charts have been negated and prices last Friday closed at technically bullish weekly high closes.
USDA at midday today reported cash cattle trade last week averaged $233.06, which compares to an average of $230.48 fetched the week prior. The noon report today showed mixed boxed beef prices, with Choice grade up $5.36 at $366.74 and Select grade down $2.25 at $343.98. Movement at midday was 54 loads. The Choice-Select spread is presently plus $22.76.
Technical analysis: October live cattle futures see a fledgling price uptrend in place on the daily bar chart. The next upside price objective for the live cattle bulls is to close October futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the July low of $216.95. First resistance is seen at today’s high of $229.55 and then at $232.00. First support is seen at $226.00 and then at $225.00.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $355.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $337.90. First resistance is seen at today’s high of $348.05 and then at $350.00. First support is seen a $340.00 and then at $337.50.
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.