Hogs
Price action: December lean hog futures fell $0.90 to $64.675, nearer the daily low and hit another contract low.
Fundamental analysis: The lean hog futures market saw more technical selling today. Near-term charts remain firmly bearish. A price downtrend remains in place on the daily bar chart. Cash hog market and CME cash index prices continue to trend lower. The latest CME lean hog index is down $0.99 to $71.16. Tuesday’s projected CME index price is down $1.10 at $70.08. The national direct five-day rolling average cash hog price quote for today is $66.99. The USDA noon pork report today showed cutout value was up $1.31 at $75.40, led by gains in ribs. Movement at midday was decent at 190.95 loads.
Technical analysis: December lean hog futures see the technical posture as overall bearish amid a price downtrend in place on the daily chart. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $68.00. The next downside price objective for the bears is closing prices below solid technical support at $62.50. First resistance is seen at $66.00 and then at last week’s high of $67.70. First support is seen at today’s contract low of $64.85 and then at $64.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed needs covered through the end of December, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle rose $0.075 to $231.20, nearer the daily low after hitting a 3.5-month high early on. November feeder cattle rose $0.425 to $348.55, nearer the daily low.
Fundamental analysis: The live and feeder cattle futures markets saw decent gains right out of the gate this morning, following a price-friendly USDA monthly cattle-on-feed report released Friday afternoon. However, modest profit-taking pressure from the shorter-term traders trimmed gains by the close.
USDA on Friday said the number of U.S. cattle on feed as of Oct. 1 fell less than 1% from a year ago, while placements decreased by 12%. September marketings were down 7% from a year ago. Inventory figures came in below analyst expectations, with placements also coming in sharply below expectations as well. Marketings came right in line with the average estimate.
USDA at midday today reported cash cattle trading last week averaged $227.06, which is up nearly $3 from the week prior’s average of $224.19. The noon report today showed higher boxed beef prices, with Choice grade up $3.37 at $369.16 and Select grade up $4.36 at $357.05. Movement at midday was light at 39 loads. The Choice-Select spread is presently plus $12.11.
Technical analysis: December live cattle and November feeders bulls have the firm near-term technical advantage and are seeing prices trending up on their daily charts. The next upside price objective for the live cattle bulls is to close December 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 $232.90 and then at $234.00. First support is seen at $229.40 and then at last week’s low of $227.225.
The next upside price objective for the feeder bulls is to close November 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 $335.00. First resistance is seen at today’s high of $351.125 and then at $353.00. First support is seen at $345.575 and then at $342.575.
What to do: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.