Hogs
Price action: December lean hog futures rose $0.55 to $68.375, near mid-range.
Fundamental analysis: The lean hog futures market saw tepid short covering after hitting a contract low on Friday. Technicals are still bearish, highlighted by a downtrend that remains in place on the daily bar chart. Cash hog market and CME cash index prices continue to trend down, further strengthening the lean hog futures bears’ case.
The latest CME lean hog index is down $0.80 at $77.61. Tuesday’s projected CME index price is down $1.10 at $76.51. The national direct five-day rolling average cash hog price quote for today is $74.79. The USDA noon pork report today showed cutout value was up $4.72 at $85.22, led by gains in butts and bellies. Movement at midday was 149.30 loads.
Technical analysis: December lean hog futures see the technical posture as overall bearish. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $72.00. The next downside price objective for the bears is closing prices below solid technical support at $65.00. First resistance is seen at $70.00 and then at last week’s high of $71.20. First support is seen at the contract low of $67.325 and then at $66.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You are now hand to mouth for corn-for-feed and soymeal for feed needs.Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle fell $0.45 to $226.60, near mid-range. November feeder cattle lost $0.85 to $341.10, nearer the session high.
Fundamental analysis: The live and feeder cattle futures markets saw modest corrective price pullbacks and some profit taking from the shorter-term specs today, following Friday’s solid gains that push markets to multi-week highs.
USDA today reported cash cattle trading last week averaged $220.14 up 34 cents from the week-prior average of $219.80. The noon report today showed gains in boxed beef prices, with Choice grade up $1.93 at $375.28 and Select grade up $0.47 at $354.77. Movement at midday was light at 42 loads. The Choice-Select spread is presently plus $20.51.
Technical analysis: December live cattle and November feeders bulls have the 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 the August high of $229.425. The next downside technical objective for the bears is closing prices below solid technical support at $218.875. First resistance is seen at last week’s high of $227.55 and then at $228.425. First support is seen at $225.00 and then at Friday’s low of $223.30.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $350.00. The next downside price objective for the bears is to close prices below solid technical support at $325.00. First resistance is seen at last week’s high of $342.40 and then at $344.00. First support is seen at $337.50 and then at $335.00.
What to do: You are now hand to mouth on all corn-for-feed and soymeal needs. Be prepared to make additional purchases if value levels present themselves.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are now hand to mouth for corn-for-feed and soymeal for feed needs .Be prepared to make purchases if value prices arise from fall harvest pressure.