Hogs
Price action: August lean hog futures rose $1.875 to $100.325, nearer the daily high and hit a six-week high.
Fundamental analysis: The lean hog futures market saw solid technical buying from the speculators today as a price uptrend remains in place on the daily bar chart. Bullish futures traders were also encouraged by rising cash hog prices. The USDA noon pork report today showed cutout value was up $0.27 at $101.48, led by gains in bellies. Movement at midday was 157.68 loads. The latest CME lean hog index is up 76 cents to $93.87. Thursday’s projected CME index price is up 73 cents at $94.60. The national direct five-day rolling average cash hog price quote for today is $98.78.
Technical analysis: August lean hog futures see a price uptrend in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $104.00. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $96.325. First resistance is seen at $101.00 and then at $102.00. First support is seen at today’s low of $98.35 and then at $97.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle fell $1.30 to $230.125, nearer the daily low and hit a nearly four-month low. August feeder cattle gained $1.15 to $349.95, nearer the daily high and hit a five-week low early on.
Fundamental analysis: The live cattle futures market today saw more technical selling pressure amid price downtrends firmly in place on the daily bar charts for both markets. The feeder futures today paused. Lower cash cattle prices this week in very light trading so far is also negative for futures. In the Northern Plains, persistently excessive heat has been severely stressing livestock. USDA’s Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 37 total New World screwworm detected cases in the U.S. There are 17 active cases, all still in Texas.
USDA at midday today reported very light cash cattle trading taking place, with steers fetching $239.43 and heifers $239.31.
The agency on Monday reported last week’s cash cattle trading averaged $248.01, down $7.11. from the week prior. The noon report today showed lower boxed beef prices, with Choice grade down $0.49 at $373.46 and Select grade down $2.33 at $362.08. Movement at midday was 66 loads. The Choice-Select spread is presently plus $11.38.
Technical analysis: Live and feeder cattle futures markets see firm price downtrends in place on their daily bar charts, which suggests still more downside price pressure in the near term. The next upside price objective for the live cattle bulls is to close August futures above resistance at $238.00. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $222.275. First resistance is seen at today’s high of $232.10 and then at Tuesday’s high of $234.225. First support is seen at $229.00 and then at $228.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $360.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $351.35 and then at Tuesday’s high of $353.475. First support is seen at $347.00 and then at $345.00.
What to do: You have corn-for-feed and soymeal needs covered through July 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-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.