Hogs
Price action: August lean hog futures fell $1.60 to $96.925, nearer the daily low.
Fundamental analysis: The lean hog futures market today saw heavy profit-taking pressure and weak long liquidation following recent gains. A price uptrend is still alive on the daily bar chart but the bulls need to show fresh power soon to keep it alive.
The USDA noon pork showed cutout value was up $1.74 at $97.99, led by gains in bellies. Movement at midday was solid at 205.05 loads. The latest CME lean hog index is down 12 cents to $91.55. Wednesday’s projected CME index price is up 11 cents at $91.66. The national direct five-day rolling average cash hog price quote for today is $96.96.
Technical analysis: August lean hog futures see a price uptrend still in place on the daily bar chart, but it’s now in some jeopardy. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $100.00. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $95.425. First resistance is seen at last week’s high of $99.175 and then at $100.00. First support is seen at $96.00 and then at $95.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle lost $0.675 to $238.425, near mid-range and hit a four-week low. August feeder cattle rose $0.15 to $360.65, near mid-range.
Fundamental analysis: The live cattle futures market saw technically based short selling today, as well as weak long liquidation as prices are trending down on the daily bar chart. Feeder futures paused again today as the bulls have at least temporarily stopped the bleeding early this week.Feeders also see a price downtrend in place on their daily bar chart, which is limiting buying interest.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is reporting 32 total New World screwworm detected cases in the U.S. the past 30 days and all still in Texas and New Mexico. There are now 18 active cases, all still in Texas.
Livestock stress may increase this week because of hotter temperatures in the Plains states.
USDA at midday today reported no cash cattle trading taking place so far early this week. The agency said cash cattle trading last week averaged $255.12, which is down $4.22 from the week prior’s average price. The noon report today showed higher boxed beef prices, with Choice grade up $1.30 at $387.78 and Select grade up $4.49 at $370.36. Movement at midday was 69 loads. The Choice-Select spread is presently plus $17.42.
Technical analysis: Live and feeder cattle futures markets see price downtrends in place on their daily bar charts, which suggests the path of least resistance for prices will remain sideways to lower. The next upside price objective for the live cattle bulls is to close August futures above resistance at $247.50. The next downside technical objective for the bears is closing prices below solid technical support at the June low of $233.975. First resistance is seen at this week’s high of $240.55 and then at $243.00. First support is seen at today’s low of $237.05 and then at $236.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $370.00. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at this week’s high of $363.125 and then at $365.00. First support is seen at this week’s low of $356.625 and then at $355.00.
What to do: You have corn-for-feed and soymeal needs covered through July 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 July in the cash market.Be prepared to make purchases if value prices continue.