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Hogs
Price action: April lean hog futures gained $1.325 to $97.075, near the daily high and hit a three-week high.
Fundamental analysis: Lean hog futures today saw renewed technical buying amid a price uptrend on the daily bar chart that was restarted today. Solid rallies in the cattle futures markets today also supported buying interest in hog futures, as did firming cash hog prices. Some improved risk appetite in the general marketplace today also aided the hog futures bulls.
The latest CME lean hog index is up 15 cents at $89.84. Thursday’s projected cash index price is up another 34 cents at $90.18. The national direct five-day rolling average cash hog price quote today is $67.90. The noon report today showed pork cutout value up 63 cents at $99.13, led by gains in butts. Movement at midday was 151.94 loads.
Technical analysis: April lean hog futures bulls have the near-term technical advantage and gained fresh power today. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at the contract high of $99.80. The next downside price objective for the bears is closing prices below solid technical support at the February low of $91.125. First resistance is seen at $97.50 and then at $99.00. First support is seen at today’s low of $95.675 and then at this week’s low of $94.70.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal needs covered through March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle rose $4.225 to $238.35, near the daily high. March feeder cattle gained $6.725 to $363.925, near the session high.
Fundamental analysis: The live cattle futures markets today saw more corrective buying and perceived bargain hunting amid cash and beef market fundamentals that remain overall bullish. Some improved trader/investor risk appetite in the general marketplace at mid-week also aided the cattle futures bulls.
There have been scattered reports of weaker cash cattle trade so far this week. However, USDA at midday today reported no cash trade yet this week. Live cattle futures continue to trade below the cash market, which is supportive for futures. USDA Monday reported last week’s cash cattle trading averaged $242.71. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up 78 cents at $388.83, while Select-grade rose $1.79 to $380.37. Movement at midday was 52 loads. The Choice-Select spread at midday today was plus $8.46.
Technical analysis: The live and feeder cattle futures have seen price uptrends on the daily bar charts negated to produce near-term technical damage. The next upside price objective for the live cattle bulls is to close April futures above resistance at $242.50. The next downside technical objective for the bears is closing prices below solid technical support at this week’s low of $228.525. First resistance is seen at today’s high of $239.00 and then at $240.00. First support is seen at today’s low of $234.80 and then at $232.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance the February high of $373.60. The next downside price objective for the bears is to close prices below solid technical support at this week’s low of $350.30. First resistance is seen at today’s high of $364.475 and then at $366.00. First support is seen at today’s low of $358.05 and then at $355.00.
What to do: Cover corn-for-feed needs through March in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.