Advice Alert: Livestock producers: Extend feed coverage... We advise livestock producers to cover through March for soymeal needs in the cash market. Meal futures have begun showing strength at historic support at $300.0. Historically, meal prices do not spend much time at or below this value level. You now have full coverage in cash through March.
Hogs
Price action: February lean hog futures fell 87 1/2 cents to $84.80, nearer the session low.
Fundamental analysis: Lean hog futures today saw routine profit-taking pressure after prices hit a 2.5-month high on Friday. Also negative for futures, cash hog prices have begun to slip lately. Still, the February lean hog futures contract is above the latest CME lean hog index, which is price-friendly for futures.
The latest CME lean hog index is down 8 cents to $81.54. Thursday’s projected cash index price is down another 29 cents at $81.25. Today’s national direct 5-day rolling average cash hog price quote was not available. The noon report today showed pork cutout value up $1.48 at $92.73, led by gains in hams. Movement at midday was good at 167.85 loads.
Technical analysis: February lean hog futures bulls still have the overall near-term technical advantage. Prices are trending up on the daily chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at $89.00. The next downside price objective for the bears is closing prices below solid technical support at $82.40. First resistance is seen at today’s high of $85.70 and then at this week’s high of $86.45. First support is seen at last week’s low of $83.925 and then at $83.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through March in the cash market. You should also have corn-for-feed needs purchased through February. Be prepared to make additional purchases.
Cattle
Price action: February live cattle fell $2.10 to $234.525, nearer the daily low. March feeder cattle lost $3.525 to $355.50, nearer the session low.
Fundamental analysis: The cattle futures markets today saw profit-taking pressure from the speculative traders, following recent gains that pushed the markets to 10-week highs. Beef packer margins that are presently in the red also limited buying interest in cattle futures.
USDA today reported very light cash cattle trading taking place so far this week at $232.00. USDA reported last week’s average cash cattle trade at $231.68—up $2.35 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade up $1.22 at $352.47, while Select-grade was down 31 cents to $350.77. Movement at midday was decent at 87 loads. The Choice-Select spread has narrowed to $1.70—the lowest in quite some time.
World Weather Inc. today said that cold rains and snow in the Plains in the coming days may cause some livestock stress from southeastern Colorado into the northern Texas Panhandle and into southwestern Kansas Friday.
Technical analysis: The live and feeder cattle futures bulls still have the firm overall near-term technical advantage. Price uptrends are in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at $240.375, which is the top of a downside price gap on the daily bar chart. The next downside technical objective for the bears is closing prices below solid technical support at $226.85. First resistance is seen at today’s high of $236.225 and then at this week’s high of $237.45. First support is seen at $233.00 and then at $232.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $343.00. First resistance is seen at this week’s high of $359.35 and then at $361.00. First support is seen at $353.125 and then at $350.00.
What to do: Cover corn-for-feed needs through February 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 March. You have corn-for-feed needs covered through February as well. Be prepared to make additional purchases if value prices continue.