Hogs
Price action: December lean hog futures fell $0.70 to $58.175, near the daily low and hit another contract low.
Fundamental analysis: The lean hog futures market saw more technical selling pressure today, as the near-term technical posture is firmly bearish. Cash hog prices and the CME cash index continued to trend lower.
The latest CME lean hog index is down $0.73 to $66.57. Tuesday’s projected CME index price is down $0.82 at $65.75. The national direct five-day rolling average cash hog price quote for today is $59.44. The USDA noon pork report today showed cutout value was up $2.36 at $72.46, led by gains in loins and picnics. Movement at midday was decent at 188.68 loads.
Technical analysis: December lean hog futures see the technical posture as firmly bearish amid a price downtrend in place on the daily chart. A bear flag has now formed 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 $65.00. The next downside price objective for the bears is closing prices below solid technical support at $55.00. First resistance is seen at $60.00 and then at $62.275. First support is seen at $57.50 and then at $56.00.
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 needs covered through the end of December, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle fell $1.25 to $219.70, near the daily low and hit a nearly four-week low. January feeder cattle rose $0.90 to $332.675, near mid-range and hit a nearly four-week low early on.
Fundamental analysis: The live cattle futures market today saw modest technical short selling, profit taking and weak long liquidation, as the near-term technical postures of both markets have significantly deteriorated the past several sessions. Feeder cattle futures traders took a pause most of the session but some short covering surfaced late in the day. Price uptrends on the daily charts for both markets have been soundly negated.
Solidly lower cash cattle trading last week also limited buying interest in futures today. USDA at midday today reported cash cattle trading last week averaged $223.65, which is down $3.41 from the week prior average of $227.06. The noon report today showed firmer boxed beef prices, with Choice grade up $0.14 at $364.80 and Select grade up $2.75 at $354.73. Movement at midday was light at 42 loads. The Choice-Select spread is presently plus $10.07.
Technical analysis: December live cattle and November feeders bulls have faded recently as price uptrends on the daily charts have been soundly negated. The next upside price objective for the live cattle bulls is to close December futures above resistance at $227.50. The next downside technical objective for the bears is closing prices below solid technical support at $216.00. First resistance is seen at $222.00 and then at $224.00. First support is seen at $219.00 and then at $217.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at the October high of $348.775. The next downside price objective for the bears is to close prices below solid technical support at $320.00. First resistance is seen at today’s high of $334.675 and then at $337.50. First support is seen at $330.00 and then at $325.00.
What to do: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.