Hogs
Price action: October lean hog futures fell $0.025 to $83.65, near mid-range and hit a three-week high.
Fundamental analysis: The lean hog futures market paused today after recent good gains that suggest the futures market has bottomed out. A price downtrend on the daily bar chart was negated Monday. Stabilization in the cattle futures markets the past four sessions has also benefitted the lean hog futures bulls. However, the cash hog market continues to trend down. The latest CME lean hog index down 66 cents to $90.86. Wednesday’s projected CME index price is down another 29 cents at $90.58. The national direct five-day rolling average cash hog price quote for today is $90.26. The USDA’s noon pork report today showed cutout value was up $0.01 at $97.68. Movement at midday was decent at 183.81 loads.
Technical analysis: October lean hog futures have seen a price downtrend on the daily bar chart soundly negated. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $86.00. The next downside price objective for the bears is closing prices below solid technical support at $80.00. First resistance is seen at today’s high of $84.075 and then at $85.00. First support is seen at this week’s low of $81.975 and then at $81.00.
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 and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $0.60 to $212.075, near mid-range. November feeder cattle fell $1.90 to $308.525, near mid-range.
Fundamental analysis: October live cattle and November feeder futures saw more technical selling pressure today. Both markets hit eight-month lows last week. Cash cattle trading last week at lower money is also limiting buying interest in futures. However, live cattle futures continue to trade at significant discounts to the cash cattle market, which could limit the downside in futures.
USDA at midday today reported very light cash cattle trading so far this week, at $220.00. The agency said cash cattle trade last week averaged $219.25. The noon report today showed higher boxed beef prices, with Choice grade up $2.20 at $378.02 and Select grade up $2.17 at $360.66. Movement at midday was 59 loads. The Choice-Select spread is presently plus $17.36.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $220.00. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at this week’s high of $213.50 and then at $215.00. First support is seen at the August low of $209.525 and then at $208.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $325.00. The next downside price objective for the bears is to close prices below solid technical support at $300.00. First resistance is seen at today’s high of $310.725 and then at this week’s high of $312.65. First support is seen at the August low of $304.15 and then at $300.00.
What to do: You have corn-for-feed and soymeal needs covered through September 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 September in the cash market.Be prepared to make purchases if value prices continue.