Hogs
Price action: December lean hogs rose 82 1/2 cents to $84.65, near mid-range.
Fundamental analysis: The lean hog futures market saw a corrective bounce, led by short covering from the shorter-term traders. Contract highs in live cattle futures and record highs in feeder futures today also aided the hog futures bulls. The near-term chart posture for the lean hog futures market continues firmly bearish, which will likely limit the upside in hog futures in the near term.
The latest CME lean hog index is down 65 cents at $99.43. Tuesday’s projected cash hog index is down another 86 cents at $98.57. Today’s national direct 5-day rolling average cash hog price quote is $97.31. The noon report today showed pork cutout value up $2.16 to $106.58, led by gains in loins, ribs and bellies. Movement at midday was 133.20 loads.
Technical analysis: December lean hog futures bears have the 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 December futures prices above solid chart resistance at $88.00. The next downside price objective for the bears is closing prices below solid technical support at $81.00. First resistance is seen at today’s high of $85.50 and then at $86.10. First support is seen at today’s low of $84.45 and then at last week’s low of $83.725.
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 December in the cash market. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: December live cattle rose $2.225 to $244.75, near the daily high and hit a contract high. November feeder cattle rose 82 1/2 cents to $376.725, nearer the daily high and hit another contract/record high.
Fundamental analysis: Overall solid supply and demand fundamentals and bullish technical charts continue to fuel price gains in the cattle futures markets. Historically tight supplies of cattle in U.S. feedlots and a solid rebound in cash cattle and boxed beef prices recently continue to drive upside price action in cattle futures markets.
USDA today reported cash cattle trade last week averaged $234.07, up $3.31 from the prior week average of $230.76. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade down 84 cents to $364.73, while Select rose $1.91 to $348.30. Movement at midday was decent at 82 loads. The Choice-Select spread is presently $16.43.
Technical analysis: The live and feeder cattle futures bulls have the firm overall near-term technical advantage. However, the feeder cattle futures market is short-term overbought and due for a downside correction soon. The next upside price objective for the live cattle bulls is to close December futures above resistance at $247.50. The next downside technical objective for the bears is closing prices below solid technical support at $235.00. First resistance is seen at today’s contract high of $244.50 and then at $245.00. First support is seen at $242.00 and then at $241.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $385.00. The next downside price objective for the bears is to close prices below solid technical support at $360.00. First resistance is seen at today’s contract high of $378.45 and then at $380.00. First support is seen at today’s low of $373.375 and then at Wednesday’s low of $370.00.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through December. For corn, you have all needs through October covered in the cash market. Be prepared to make additional purchases if value prices continue.