Hogs
Price action: August lean hogs fell 22 1/2 cents to $107.025, near the daily low.
Fundamental analysis: The lean hog futures bulls are working to stabilize the market following this week’s selling pressure. Near-term technicals have deteriorated, with fresh pork market fundamentals also weakening. The latest CME lean hog index is up another 13 cents to $110.45 as of July 28. Thursday’s cash index projected price quote is up 6 cents at $110.51.The national direct five-day rolling average cash hog price quote today is $113.03. The noon report today showed pork cutout value rose 6 cents to $115.91, with bellies leading gains in primal cuts. Movement at midday was good at 194.14 loads.
Technical analysis: Lean hog futures bulls have the overall near-term technical advantage. However, a fledgling price uptrend on the daily bar chart has stalled out. The next upside price objective for the hog bulls is to close August prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at $105.00. First resistance is seen at last week’s high of $108.90 and then at $110.00. First support is seen at today’s low of $106.675 and then at $105.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.
Cattle
Price action: August live cattle rose $3.35 to $233.075, near the session high and hit another contract/record high. August feeder cattle rose $2.75 to $338.95, near the daily high and hit another contract/record high.
Fundamental analysis: Live and feeder cattle futures bulls have the solid overall near-term technical advantage. Overall cash cattle and beef market fundamentals remain solid. However, this latest surge in live cattle futures prices may be a climaxing-type price move that puts in a major top sooner rather than later. Still, live cattle futures’ steep discounts to cash cattle market should continue to limit selling in futures.
Very light cash cattle trade has taken place this week, with an average price fetched of $240.00, according to USDA. Last week’s USDA average cash cattle trading price was $239.38, which was a record high weekly average. The noon report today showed Choice-grade boxed beef cutout value fell $1.14 to $363.05, while Select- grade dipped 49 cents to $341.99. Movement at midday was very strong at 116 loads The Choice-Select spread is presently $21.06. Beef packer margins are presently deep in the red, suggesting packers may be reluctant to bid higher for cash cattle when trade gets more active late this week.
Technical analysis: The next upside price objective for the live cattle bulls is to close August futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $225.00. First resistance is seen at today’s contract high of $232.15 and then at $233.00. First support is seen at today’s low of $229.70 and then at $227.00.
The next upside price objective for the feeder bulls is to close August 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 $325.00. First resistance is seen at today’s contract high of $338.325 and then at $340.00. First support is seen at $334.00 and then at this week’s low of $331.20.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.