Hogs
Price action: June lean hog futures rose $1.475 to $103.20, near mid-range.
Fundamental analysis: The lean hog futures market saw a solid short-covering and perceived bargain-hunting bounce today, after prices last Friday hit a four-month low.
The latest CME lean hog index is down 14 cents at $90.37. Wednesday’s projected cash index price is up 14 cents at $90.51. The national direct five-day rolling average cash hog price quote today is $70.80. The noon report today showed pork cutout value down $0.01 at $100.21, led by losses in bellies. Movement at midday was decent at 170.62 loads.
Technical analysis: June lean hog futures bears still have the overall near-term technical advantage. Prices are trending down on the daily bar chart. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at the April high of $107.85. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at today’s high of $103.725 and then at $105.00. First support is seen at $102.00 and then at this week’s low of $101.10.
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 should have all your soymeal needs covered through April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle fell $2.525 to $243.55, nearer the daily low and hit a nearly three-week low. May feeder cattle fell $2.55 to $358.55, nearer the daily low and hit a three-week low.
Fundamental analysis: The cattle futures markets today saw more technical selling pressure after recent losses have produced near-term chart damage.
USDA at midday today reported very light cash cattle trading taking place so far this week at $246.00. Last week’s average cash cattle trading was at $248.02. The noon report today showed wholesale boxed beef cutout values solidly up again. Choice-grade was up $3.49 at $387.05, while Select-grade was up $5.45 at $389.06. Movement at midday was 59 loads. The Choice-Select spread at midday today narrowed to minus $2.01.
Technical analysis: Cattle futures markets have seen price uptrends on the daily bar charts stall out. There are early chart clues to begin to suggest market tops are in place. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $252.00. The next downside technical objective for the bears is closing prices below solid technical support at $240.00. First resistance is seen at today’s high of $246.80 and then at this week’s high of $248.90. First support is seen at today’s low of $242.825 and then at $241.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $377.575. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at today’s high of $364.20 and then at this week’s high of $367.45. First support is seen at today’s low of $357.325 and then at $355.00.
What to do: Cover corn-for-feed needs through April in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.