Hogs
Price action: October lean hogs rose 67 1/2 cents to $100.10, near mid-range and hit a contract high.
Fundamental analysis: The lean hog futures bulls got right back in the saddle today after a bout of profit taking Wednesday. The speculative hog traders are still wanting to ride that bullish futures train amid firmly positive technicals and amid a rebound in fresh pork prices late this week.
The latest CME lean hog index is up 10 cents at $105.00. Friday’s projected cash hog index is up 6 cents at $105.06. Today’s national direct 5-day rolling average cash hog price quote is $105.10. The noon report today showed pork cutout value up 78 cents to $112.41, led by gains in bellies. Movement at midday was 142.50 loads.
Hog futures traders are awaiting Thursday’s USDA quarterly hogs and pigs report. The U.S. hog herd on September 1 was likely about the same size as it was a year earlier, a Reuters survey of analysts showed.
Technical analysis: October lean hog futures bulls still have the solid overall near-term technical advantage. A choppy, 2.5-month-old price uptrend remains in place on the daily bar chart. The next upside price objective for the hog bulls is to close October 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 $97.00. First resistance is seen at today’s contract high of $100.80 and then at $102.00. First support is seen at Wednesday’s low of $99.025 and then at this week’s low of $97.90
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: October live cattle fell $2.00 to $232.05, nearer the daily low. November feeder cattle lost $5.575 to $352.225, near mid-range.
Fundamental analysis: The live and feeder cattle markets today succumbed to more profit-taking pressure and weak long liquidation as the cattle and fresh beef markets are deteriorating a bit. Some risk aversion in the general marketplace also kept the buyers in the cattle futures markets scarce today. The U.S. government is on the verge of a shutdown, with the Trump administration warning of mass firings in federal agencies if a shutdown occurs.
USDA today reported that so far this week very light cash cattle trading has occurred at an average price of $232.00. Last week’s cash cattle trading average price was $237.51. The noon report today showed wholesale boxed beef cutout values down again, with Choice-grade losing $3.83 to $373.56, while Select fell $2.71 to $353.71. Movement at midday was again very good at the lower prices, at 107 loads. The Choice-Select spread is presently $19.85.
Technical analysis: The live and feeder cattle futures bulls have faded late this week to better suggest major market tops are in place. The next upside price objective for the live cattle bulls is to close October futures above resistance at this week’s high of $237.90. The next downside technical objective for the bears is closing prices below solid technical support at the September low of $228.80. First resistance is seen at today’s high of $233.725 and then at $235.00. First support is seen at today’s low of $230.875 and then at $228.80.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at this week’s high of $363.775. The next downside price objective for the bears is to close prices below solid technical support at the September low of $342.125. First resistance is seen at $354.00 and then at today’s high of $357.225. First support is seen at $349.00 and then at $347.00.
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.