Hogs
Price action: June lean hog futures fell $1.80 to $98.425, near the daily low and hit a five-month low.
Fundamental analysis: The lean hog futures market saw renewed technical selling today. The near-term technical posture for June hogs remains firmly bearish as prices are in a downtrend on the daily bar chart. The latest CME lean hog index is down 38 cents at $90.41. Wednesday’s projected cash index price is up 7 cents at $90.48. The national direct five-day rolling average cash hog price quote today is $94.85. The noon report today showed pork cutout value down $0.78 at $96.20, led by losses in loins and bellies. Movement at midday was good at 209.81 loads.
Technical analysis: June lean hog futures bears have the firm overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $102.50. The next downside price objective for the bears is closing prices below solid technical support at $95.00. First resistance is seen at this week’s high of $100.90 and then at last week’s high of $101.95. First support is seen at $98.00 and then at $97.00.
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 and corn-for-feed needs covered in the cash market through May. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $1.70 to $247.70, near the daily low. August feeder cattle lost $5.75 to $356.55, near the daily low and closed at a six-week low close.
Fundamental analysis: The cattle futures markets saw profit-taking pressure and weak long liquidation today. A positive for live cattle futures today was a report in the WSJ that said the Trump administration is now not planning to temporarily lower tariffs on beef imported into the U.S., after receiving blowback from ranchers and legislators. However, other news reports said the Trump administration is still looking for ways to lower retail beef prices. August feeders see a bearish double-top reversal pattern on the daily bar chart. Selling interest in live cattle futures today was also limited by higher cash cattle prices. USDA at midday today reported light cash trading so far this week, with steers fetching an average price of $259.71 and heifers $260.00. Last week’s average cash cattle trade was $258.52, up $3.50 from the week prior. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $0.67 at $391.89, while Select-grade gained $2.82 to $394.21. Movement at midday was 48 loads. The Choice-Select spread at midday today was minus $2.42.
Technical analysis: Cattle futures bulls have the overall near-term technical advantage but are fading. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $256.625. The next downside technical objective for the bears is closing prices below solid technical support at $240.925. First resistance is seen at $250.00 and then at today’s high of $253.00. First support is seen at this week’s low of $245.475 and then at $244.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at $360.00 and then at today’s high of $367.50. First support is seen at $355.00 and then at $352.50.
What to do: Cover corn-for-feed and soymeal needs through May 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 and soymeal for feed needs covered in the cash market through May. Be prepared to make additional purchases if value prices continue.