Hogs
Price action: February lean hogs rose $1.75 to $84.175, nearer the daily high and hit a six-week high.
Fundamental analysis: Lean hog futures saw solid technical buying interest today as the near-term chart posture for the market has turned firmly bullish. Recent gains in the cash market and the CME hog index also suggest seasonal bottoms are in place for cash and futures markets. Nearby December lean hogs have pushed above the CME lean hog futures, also a positive sign.
The latest CME lean hog index is up 27 cents to $82.16. Friday’s projected cash index price is up another 41 cents at $82.57. Today’s national direct 5-day rolling average cash hog price quote is $71.80. The noon report today showed pork cutout value up 83 cents to $98.10, led by gains in butts. Movement at midday was 133.01 loads.
Technical analysis: February lean hog futures bulls have the firm overall near-term technical advantage and gained more power today. Prices are trending up on the daily chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of $80.65. First resistance is seen at today’s high of $84.575 and then at $85.00. First support is seen at $83.00 and then at today’s low of $82.675.
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 February in the cash market. You are hand-to-mouth for corn-for-feed needs. Be prepared to make additional purchases.
Cattle
Price action: February live cattle rose $2.425 to $230.95, nearer the daily high and hit a six-week high. January feeder cattle rose $5.025 to $343.40, near mid-range and hit a six-week high.
Fundamental analysis: The cattle futures market bulls are back in business. More chart-based buying from the speculators was featured again today. Both markets are trending higher on the daily charts. Solidly higher cash cattle trade so far this week at much better money also supported good buying interest in the futures markets today.
USDA at midday today reported active cash cattle trading activity late this week, with steers averaging $226.31 and heifers $226.41. The average cash cattle trade for last week was $221.21. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade down 42 cents at $358.94, while Select-grade rose 77 cents to $345.65. Movement at midday was good at 114 loads. The Choice-Select spread is presently $13.29.
In the Northern Plains, snowfall in coming days will be significant in Montana, resulting in livestock stress, said World Weather.
Technical analysis: The live and feeder cattle futures bulls have the firm near-term technical advantage and gained more power today. Prices are trending up on the daily bar charts, suggesting that more price upside is probable in the near term. The next upside price objective for the live cattle bulls is to close February futures above resistance at $240.00. 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 high of $231.775 and then at $233.00. First support is seen at $228.70 and then at this week’s low of $225.65.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $348.175, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at today’s high of $345.25 and then at $348.175. First support is seen at $338.875 and then at this week’s low of $332.75.
What to do: Cover soymeal needs through February in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through February. You are hand-to-mouth for corn-for-feed needs. Be prepared to make additional purchases if value prices continue.