Hogs
Price action: August lean hog futures rose $0.125 to $102.975, near the daily high and closed at a nine-week high close.
Fundamental analysis: The lean hog futures market paused today after two sessions in a row of good gains. A price uptrend remains in place on the daily bar chart, which limited selling interest today and continues to invite the chart-based specs to the long side of the futures market. Bulls continue to be encouraged by rising cash hog prices. The latest CME lean hog index is up 43 cents to $97.91. Tuesday’s projected CME index price is up another 32 cents at $98.23. The national direct five-day rolling average cash hog price quote for today is $100.60. The USDA’s noon pork report today showed cutout value was up $2.29 at $106.92, led by gains in all cuts. Movement at midday was 138.40 loads.
Technical analysis: August lean hog futures see a price uptrend firmly in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $105.00. The next downside price objective for the bears is closing prices below solid technical support at $96.325. First resistance is seen at last week’s high of $103.05 and then at $104.00. First support is seen at today’s low of $102.10 and then at $101.00.
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: August live cattle fell $1.85 to $225.225, near mid-range. August feeder cattle lost $7.075 to $338.25, near the daily low and closed at a seven-month low close. October through May feeder cattle futures contracts closed down the daily trading limit of $10.75.
Fundamental analysis: The cattle futures markets today saw selling pressure from the news USDA late Friday announced a coordinated, phased reopening of southern cattle ports, contingent on Mexico’s adherence to the Joint Action Plan. That rattled the futures, especially feeders, from a supply perspective. However, this news did not blindside traders, who had been reckoning a reopening of the border was coming at some point.
Livestock stress continues high in the Plains states and will stay high because of oppressive heat. Livestock weight gains were down and will stay down today as the hottest weather continues one more day.
USDA at midday today reported cash cattle trading last week averaged $230.48, which is down $7.80 from last week’s reported average cash cattle trade at $238.28. The noon report today showed mixed boxed beef prices, with Choice grade up $1.72 at $362.96 and Select grade down $0.25 at $346.46. Movement at midday was 50 loads. The Choice-Select spread is presently plus $16.50.
Technical analysis: Live and feeder cattle futures markets still see price downtrends in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at $233.00. The next downside technical objective for the bears is closing prices below solid technical support at $220.00. First resistance is seen at last week’s high of $228.50 and then at $230.00. First support is seen at $224.00 and then at today’s low of $222.75.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $353.475. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $343.675 and then at $345.00. First support is seen at $335.95 and then at $330.00.
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.