Hogs
Price action: June lean hog futures rose $1.775 to $103.75, nearer the daily high and hit a three-week high.
Fundamental analysis: The lean hog futures market saw more short covering and perceived bargain hunting today. Strong gains in the cattle futures markets this week also supported buying interest in hog futures today.
The latest CME lean hog index is down 7 cents at $91.19. Thursday’s projected cash index price is up 12 cents at $91.31. The national direct five-day rolling average cash hog price quote today is $91.91. The noon report today showed pork cutout value down $0.08 at $98.18, led by losses in bellies. Movement at midday was decent at 182.26 loads.
Technical analysis: June lean hog futures bulls and bears are back on a level overall near-term technical playing field. A price downtrend on the daily bar chart has been negated. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at today’s high of $104.45 and then at $105.00. First support is seen at today’s low of $102.225 and then at this week’s low of $101.10.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal needs covered through April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $1.75 to $255.25, near mid-range and hit a contract and record high early on. May feeder cattle fell $0.225 to $371.50, nearer the daily low after hitting a two-week high early on.
Fundamental analysis: The cattle futures markets bulls came out of the chute strong today, but faded a bit as the trading session progressed as profit-taking from the shorter-term traders was featured. Still, this week’s strong gains put the bulls back in firm technical control.
Active cash cattle trading at solidly higher levels at mid-week also supported buying interest in cattle futures. USDA at midday today reported active cash cattle trading so far this week, with steers averaging $254.58 and heifers $254.28. That’s well above last week’s cash cattle price that averaged $246.18. The noon report today showed wholesale boxed beef cutout values weaker. Choice-grade was down $0.94 at $387.96, while Select-grade lost $0.94 at $387.84. Movement at midday was decent at 70 loads. The Choice-Select spread at midday today was plus $0.12.
Technical analysis: Cattle futures markets bulls have the strong near-term technical advantages. The next upside price objective for the live cattle bulls is to close June futures above resistance at $260.00. The next downside technical objective for the bears is closing prices below solid technical support at $245.00. First resistance is seen at today’s contract high of $255.975 and then at $257.50. First support is seen at $252.00 and then at $250.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $377.575. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $354.05. First resistance is seen at today’s high of $374.82 and then at $377.575. First support is seen at Tuesday’s low of $365.75 and then at this week’s low of $360.90.
What to do: Cover corn-for-feed needs through April 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 April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.