Hogs
Price action: June lean hog futures fell $0.60 to $97.925, near the daily low and hit a five-month low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure today. The near-term technical posture for June hogs remains firmly bearish as prices are in a downtrend on the daily bar chart.
The latest CME lean hog index is up 4 cents at $90.50. Wednesday’s projected cash index price is up 5 cents at $90.55. The national direct five-day rolling average cash hog price quote today is $94.15. The noon report today showed pork cutout value down $0.48 at $97.88, led by losses in loins. Movement at midday was good at 261.58 loads.
Technical analysis: June lean hog futures bears have the firm 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 $102.50. The next downside price objective for the bears is closing prices below solid technical support at $95.00. First resistance is seen at this week’s high of $100.45 and then at $102.00. First support is seen at $97.00 and then at $96.00.
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 rose $1.175 to $254.55, near mid-range. August feeder cattle rose $4.80 to $363.65, near the daily high.
Fundamental analysis: The cattle futures markets saw better technical buying interest today, and also support from last week’s sharply higher cash trade. USDA at midday today reported very light cash cattle trading so far this week, at $262.50. Last week’s average cash cattle trade was a record-high at $262.85. That’s up $4.33 from the week prior. The noon report today showed wholesale boxed beef cutout values solidly higher. Choice-grade was up $3.61 at $395.75, while Select-grade rose $3.65 to $393.88. Movement at midday was 43 loads. The Choice-Select spread at midday today was plus $1.87.
Technical analysis: Live cattle futures bulls have the solid overall near-term technical advantage. Prices are very close to the 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 $256.625 and then at $258.00. First support is seen at today’s low of $253.00 and then at $250.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at 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 this week’s high of $363.75 and then at $365.00. First support is seen at $360.00 and then at today’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.