Hogs
Price action: August lean hog futures rose $0.50 to $97.225, near mid-range and hit a two-week high.
Fundamental analysis: The lean hog futures market today saw more short covering. While the near-term technicals remain overall bearish, a price downtrend in place on the daily bar chart is now in jeopardy. More price gains this week would negate the price downtrend to suggest a market bottom is in place.
The latest CME lean hog index is down 53 cents at $91.64. Wednesday’s projected cash index price is down 30 cents at $91.47. The national direct five-day rolling average cash hog price quote today is $97.09. The noon report today showed pork cutout value down $0.54 at $95.54, led by losses in bellies. Movement at midday was decent at 186.48 loads.
Technical analysis: August lean hog futures bears still have the overall near-term technical advantage. Prices are still in a downtrend on the daily bar chart, but now just barely. 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 the November low of $93.675. First resistance is seen at today’s high of $98.35 and then at $100.00. First support is seen at this week’s low of $96.10 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 fell $1.35 to $246.00, nearer the daily low. August feeder cattle lost $2.275 to $368.15, nearer the session low.
Fundamental analysis: The cattle futures markets today took a pause after recent gains and saw some profit taking. The cattle bulls were somewhat squelched by today’s big sell off in the U.S. stock market, which if it extends would likely rattle U.S. consumer confidence. Profit taking from recent gains was also featured today.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 16 total New World screwworm detected cases, but all still in Texas and New Mexico, with the new one in Texas.
USDA at midday today reported light cash cattle trading so far this week, averaging $260.00. Last week’s cash cattle average trade was $259.63, up $3.55 from the week prior. The noon report today showed wholesale boxed beef cutout values higher, with Choice back above $400.00. Choice-grade was up $4.20 at $400.26, while Select-grade rose $7.18 to $382.77. Movement at midday was 59 loads. The Choice-Select spread at midday today was plus $17.49.
Technical analysis: Live and feeder cattle futures see price uptrends still in place on their daily bar charts. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $251.65. 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 $250.00 and then at $251.65. First support is seen at $245.00 and then at $243.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the contract high of $379.45. The next downside price objective for the bears is to close prices below solid technical support at $355.00. First resistance is seen at today’s high of $371.575 and then at this week’s high of $373.15. First support is seen at this week’s low of $367.125 and then at $365.00.
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.