Hogs
Price action: December lean hog futures fell $0.875 to $55.15, near mid-range.
Fundamental analysis: The lean hog futures market saw renewed technical selling today amid technicals that are still firmly bearish. Cash hog prices and the CME cash index continuing to trend lower. However, there are early internal signs that the CME lean hog index may be close to bottoming out.
The latest CME lean hog index is down $0.21 to $59.78. Friday’s projected CME index price is down $1.00 at $58.78. The national direct five-day rolling average cash hog price quote for today was not available due to packer submission problems. The USDA noon pork report today showed cutout value was down $0.28 at $69.06, led by losses in picnics. Movement at midday was 171.57 loads.
Technical analysis: December lean hog futures see a price downtrend in place on the daily chart. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $60.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $53.175. First resistance is seen at $57.10 and then at $58.00. First support is seen at today’s low of $54.625 and then at $53.175.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You are covered through the end of December for corn-for-feed and covered through November for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle fell $0.075 to $218.90, near mid-range. January feeder cattle gained $3.875 to $331.675, nearer the daily high.
Fundamental analysis: The live cattle futures market saw some mild corrective selling today amid very light cash cattle trading being reported at lower money. Feeder futures saw more short covering and perceived bargain buying. Futures price action the past few sessions still suggests the bears are exhausted and that a market bottoms may be in place.
USDA at midday today reported very light cash trading at $211.93. Last week’s cash cattle average price was $215.43, down over $8 from the week prior. The noon report today showed mixed boxed beef prices, with Choice grade down $0.09 at $360.17 and Select grade up $1.78 at $349.25. Movement at midday was decent at 98 loads. The Choice-Select spread is presently plus $10.92.
More than 40 cases of New World screwworm have been confirmed so far in November, making it the worst month for outbreaks since the pest first appeared in Texas earlier this year, Bloomberg reported, citing USDA data. Cases began accelerating in October, when NWS spread to Arizona for the first time.
Greg Ibach, USDA’s nominee for undersecretary of agriculture for trade and foreign agricultural affairs, told the Senate Agriculture Committee this week that the U.S. needs to engage China to ensure beef plants are authorized to export to the country,Agri-Pulse reported.
Technical analysis: December live cattle and November feeders have seen price downtrends on their daily charts negated. Recent price action also suggests the bears have become exhausted and that near-term market bottoms are in place. The next upside price objective for the live cattle bulls is to close December futures above resistance at $225.00. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $210.85. First resistance is seen at today’s high of $220.85 and then at $223.00. First support is seen at $216.00 and then at this week’s low of $214.70.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $340.00. The next downside price objective for the bears is to close prices below solid technical support at the November low of $312.05. First resistance is seen at today’s high of $334.075 and then at $337.50. First support is seen at today’s low of $327.55 and then at $323.50.
What to do: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are covered through the end of December for corn-for-feed and covered through November for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.