Hogs
Price action: June lean hog futures fell $0.225 to $98.525, near the daily low.
Fundamental analysis: The lean hog futures market saw a pause in a bear market today. The near-term technical posture for June hogs is bearish as prices are still in a downtrend on the daily bar chart. That means the path of least resistance for prices at present is sideways to lower.
The latest CME lean hog index is down 2 cents at $90.46. Tuesday’s projected cash index price is up 4 cents at $90.50. The national direct five-day rolling average cash hog price quote today is $94.50. The noon report today showed pork cutout value up $1.64 at $99.20, led by gains in loins and bellies. Movement at midday was 148.51 loads.
Technical analysis: June lean hog futures bears have the 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 $104.45. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of $98.35. First resistance is seen at today’s high of $100.45 and then at $102.00. First support is seen at the May low of $98.35 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 $0.525 to $253.375, nearer the daily low. August feeder cattle fell $2.60 to $358.85, near the daily low.
Fundamental analysis: The cattle futures markets saw a pause and some profit-taking today. Solidly higher cash cattle prices fetched last week limited selling interest in futures. USDA at midday today reported last week’s average cash cattle trade was $262.85. That’s up $4.33 from the week prior. The noon report today showed wholesale boxed beef cutout values higher. Choice-grade was up $2.67 at $391.92, while Select-grade rose $0.81 to $390.06. Movement at midday was 41 loads. The Choice-Select spread at midday today was plus $1.86.
Technical analysis: Live cattle futures bulls have the solid overall near-term technical advantage. 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 the May low of $245.475. First resistance is seen at $256.625 and then at last week’s high of $258.00. First support is seen at $252.00 and then at $250.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $363.75 and then at $365.00. First support is seen at $357.00 and then at $355.00.
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.