Hogs
Price action: October lean hog futures rose $1.45 to $83.675, nearer the session high.
Fundamental analysis: The lean hog futures market saw heavy short covering and perceived bargain buying today, after recent selling pressure that last Friday pushed October hogs to a four-week low. Good follow-through buying on Tuesday would begin to suggest the hog futures market has put in a near-term price bottom. However, the cash hog market is still trending down, to keep the bears in control.
The latest CME lean hog index is down 36 cents to $96.30. Tuesday’s projected CME index price is down 21 cents at $96.09. The national direct five-day rolling average cash hog price quote for today is $98.90. The USDA’s noon pork report today showed cutout value was up $1.15 at $102.65, led by gains in picnics and loins. Movement at midday was 127.74 loads.
Technical analysis: October lean hog futures are still trapped in a downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $87.00. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $81.325. First resistance is seen at $85.00 and then at $86.00. First support is seen at today’s low of $82.275 and then at $81.325.
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 and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle rose $1.625 to $226.90, nearer the daily high. September feeder cattle lost $0.65 to $344.575, near mid-range.
Fundamental analysis: October live cattle futures today saw short covering, while September feeders saw some mild technical selling pressure. Selling interest was limited by higher cash cattle trading that occurred last week.
USDA at midday today reported cash cattle trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. The noon report today showed mixed boxed beef prices, with Choice grade up $7.21 at $371.57 and Select grade down $2.29 at $350.08. Movement at midday was light at 34 loads. The Choice-Select spread is presently plus $21.49.
Technical analysis: October live cattle and September feeder cattle futures still see price uptrends in place on the daily bar charts but they need to show fresh power soon to keep them alive. The next upside price objective for the live cattle bulls is to close October futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at the July low of $216.95. First resistance is seen at $228.00 and then at last week’s high of $230.325. First support is seen at $225.00 and then at last week’s low of $222.75.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $355.00. The next downside price objective for the bears is to close prices below solid technical support at the July low of $330.70. First resistance is seen at last week’s high of $349.85 and then at $353.00. First support is seen at last week’s low of $339.90 and then at $338.00.
What to do: You have corn-for-feed and soymeal needs covered through September 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 September in the cash market. Be prepared to make purchases if value prices continue.