Hogs
Price action: December lean hog futures fell $2.65 to $62.025, near the daily low and careened to another contract low.
Fundamental analysis: The lean hog futures market saw heavy technical selling today. Near-term charts remain firmly bearish. A price downtrend remains in place on the daily bar chart. However, the hog futures market is now short-term oversold and due for at least a corrective bounce. Cash hog market and CME cash index prices continue to trend lower. The latest CME lean hog index is down $1.10 to $70.06. Wednesday’s projected CME index price is down $0.70 at $69.36. The national direct five-day rolling average cash hog price quote for today is $65.83. The USDA noon pork report today showed cutout value was down $0.99 at $72.81, led by losses in bellies. Movement at midday was decent at 198.85 loads.
Technical analysis: December lean hog futures see the technical posture as firmly bearish amid a price downtrend in place on the daily chart. However, the market is now short-term oversold and due for at least a corrective rebound.
The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $66.00. The next downside price objective for the bears is closing prices below solid technical support at $60.00. First resistance is seen at $64.00 and then at $64.65. First support is seen at today’s contract low of $62.10 and then at $61.00.
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 $0.35 to $230.85, near mid-range. November feeder cattle rose $1.475 to $350.025, near the daily high and closed at a 3.5-month high close.
Fundamental analysis: The live cattle futures market saw a pause and mild profit taking today, while feeder cattle futures benefited from lower corn prices and also saw some technical buying.
USDA at midday today reported active cash cattle trading for a Tuesday, with steers averaging $227.08 and heifers $227.92. The agency Monday said cash cattle trading last week averaged $227.06, which is up nearly $3 from the week prior. The noon report today showed higher boxed beef prices, with Choice grade up $4.15 at $373.59 and Select grade up $2.55 at $360.11. Movement at midday was decent at 76 loads. The Choice-Select spread is presently plus $13.48.
Technical analysis: December live cattle and November feeders bulls have the firm near-term technical advantage and are seeing prices trending up on their daily charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $225.00. First resistance is seen at today’s high of $231.575 and then at this week’s high of $232.90. First support is seen at today’s low of $229.75 and then at last week’s low of $227.225.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $360.00. The next downside price objective for the bears is to close prices below solid technical support at $335.00. First resistance is seen at this week’s high of $351.125 and then at $353.00. First support is seen at today’s low of $346.325 and then at $342.575.
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.