Hogs
Price action: June lean hog futures fell $0.50 to $101.95, nearer the daily low and hit a more-than-three-month low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure at mid-week, amid a price downtrend in place on the daily bar chart.
The latest CME lean hog index is up 6 cents at $90.33. Thursday’s projected cash index price is up 27 cents at $90.60. The national direct five-day rolling average cash hog price quote today is $69.80. The noon report today showed pork cutout value down $1.66 at $96.94, led by losses in ribs and bellies. Movement at midday was 154.73 loads.
Technical analysis: June lean hog futures bears have the overall near-term technical advantage. Prices are trending down 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 the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at today’s high of $102.65 and then at this week’s high of $103.80. First support is seen at $101.00 and then at $100.00.
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 needs covered through April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $0.35 to $251.075, nearer the daily high. May feeder cattle fell $3.90 to $370.95, nearer the daily low.
Fundamental analysis: The cattle futures markets saw routine profit-taking pressure today that is not unhealthy for the price uptrends to be extended. Solid cash cattle and beef market fundamentals remain intact.
USDA reports light cash cattle trading so far this week at an average of $247.93. Last week’s average cash trade was $248.38. That’s up $3.42 from the prior week’s average of $244.96. The noon report today showed wholesale boxed beef cutout values down. Choice-grade was down $1.18 at $382.02, while Select-grade was down $0.57 at $379.23. Movement at midday was 55 loads. The Choice-Select spread at midday today was plus $2.79.
Technical analysis: Cattle futures markets bulls have solid price uptrends in place on the daily bar charts. There are no early chart clues to suggest market tops are close at hand. The next upside price objective for the live cattle bulls is to close June futures above resistance at $255.00. The next downside technical objective for the bears is closing prices below solid technical support at $244.00. First resistance is seen at the contract high of $252.00 and then at $253.00. First support is seen at this week’s low of $248.20 and then at $246.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the record high of $381.025. The next downside price objective for the bears is to close prices below solid technical support at $365.00. First resistance is seen at today’s high of $374.95 and then at the contract high of $377.575. First support is seen at today’s low of $369.40 and then at $367.00.
What to do: Cover corn-for-feed needs through April 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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.