Hogs
Price action: June lean hog futures fell $0.65 to $97.275, near the daily low and hit a five-month low.
Fundamental analysis: The lean hog futures market saw still more technical selling pressure today. The near-term technical posture for June hogs remains firmly bearish as prices remain in a downtrend on the daily bar chart.
The latest CME lean hog index is up 5 cents at $90.55. Thursday’s projected cash index price is up 44 cents at $91.00. The national direct five-day rolling average cash hog price quote today is $93.10. The noon report today showed pork cutout value down $0.70 at $96.18, led by losses in picnics, ribs and bellies. Movement at midday was 170.14 loads.
Technical analysis: June lean hog futures bears have the solid 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 $101.80. The next downside price objective for the bears is closing prices below solid technical support at $95.00. First resistance is seen at Tuesday’s high of $98.95 and then at this week’s high of $100.45. First support is seen at $96.00 and then at $95.00.
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 $1.275 to $253.275, near mid-range. August feeder cattle rose $2.125 to $365.775, nearer the daily high.
Fundamental analysis: The live cattle futures markets saw routine profit-taking pressure today. Feeders saw some technical buying featured. Live cattle futures prices are still not far below the recent contract/record highs.
USDA at midday today reported light cash cattle trading so far this week, with steers averaging $263.74 and heifers $264.00. Last week’s average cash cattle trade was a record-high at $262.85--up $4.33 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was down $1.54 at $394.21, while Select-grade rose $1.28 to $394.86. Movement at midday was decent at 73 loads. The Choice-Select spread at midday today was minus $0.65.
Cattle traders are awaiting Friday afternoon’s USDA monthly cattle-on-feed report. The report is expected to show cattle on Feed as of May 1 at 11.558 million head, which would be 101.6% of the level seen one year ago at the same time. Placements in April are seen at 103.4 percent of last year, at 1.668 million head. Marketings in April are seen at 90.7% of one year ago, at 1.655 million head. These numbers are from a Reuters survey of analysts.
Technical analysis: Live cattle futures bulls have the solid overall near-term technical advantage. Prices are still close to the recent contract/record high. 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 today’s high of $254.85 and then at $256.625. First support is seen at today’s low of $251.60 and then at $250.00.
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 $367.50 and then at $370.00. First support is seen at $360.00 and then at this week’s low of $357.225.
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.