Hogs
Price action: October lean hog futures gained $0.225 to $83.55, near mid-range.
Fundamental analysis: The lean hog futures market saw modest short covering today as trading has turned choppy the past few sessions. The October contract remains in a price downtrend on the daily bar chart. The cash hog market is still trending down, which may limit further upside in futures in the near term. The latest CME lean hog index is down 15 cents to $95.94. Thursday’s projected CME index price is down 5 cents at $95.89. The national direct five-day rolling average cash hog price quote for today is $97.04. The USDA’s noon pork report today showed cutout value was down $0.19 at $101.29, led by losses in bellies. Movement at midday was 166.09 loads.
Technical analysis: October lean hog futures are still in a downtrend on the daily bar chart but now just barely. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at the August low of $81.325. First resistance is seen at $85.00 and then at $86.00. First support is seen at today’s low of $82.95 and then at this week’s low of $82.275.
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 $2.525 to $223.80, nearer the daily low. September feeder cattle lost $5.90 to $339.35, nearer the daily low and hit a two-week low.
Fundamental analysis: October live cattle and September feeder futures today saw fresh technical selling pressure today, as near-term price uptrends on the daily charts were negated, which reinvigorated the bears. Cattle futures bulls got no help today from higher cash cattle trading that occurred last week. USDA at midday today reported very light cash cattle taking place so far this week at $235.00. The agency on Monday reported cash trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. The noon report today showed firmer boxed beef prices, with Choice grade up $2.47 at $373.78 and Select grade up $0.40 at $350.20. Movement at midday was 55 loads. The Choice-Select spread is presently plus $23.58.
Solid gains in corn futures today also worked to pressure feeder cattle futures. In the southern Plains states, livestock heat stress will prevail during much of the next two weeks, making weight gains a challenge.
Technical analysis: October live cattle and September feeder cattle futures have now seen price uptrends negated on the daily bar charts. The next upside price objective for the live cattle bulls is to close October futures above resistance at the August high of $230.325. 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 $226.40 and then at this week’s high of $228.45. First support is seen at last week’s low of $222.75 and then at $220.00.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at the August high of $349.85. The next downside price objective for the bears is to close prices below solid technical support at the July low of $330.70. First resistance is seen at $345.00 and then at last week’s high of $349.85. First support is seen at today’s low of $338.60 and then at $335.00.
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.