Hogs
Price action: June lean hog futures rose $1.675 to $101.425, nearer the daily high and scored a 4.5-month low early on.
Fundamental analysis: The lean hog futures market saw short covering today, following recent price pressure. Still, the near-term chart posture for June hogs has deteriorated, to suggest more selling from the speculators in the near term. Prices are in a downtrend on the daily bar chart. Gains in the cattle futures markets today also supported some buying interest in hogs.
The latest CME lean hog index is down 11 cents at $91.30. Wednesday’s projected cash index price and the national direct cash hog price were not available due to packer submission problems. The noon report today showed pork cutout value up $0.89 at $98.25, led by gains in ribs and bellies. Movement at midday was decent at 184.45 loads.
Technical analysis: June lean hog futures bears have the overall near-term technical advantage. Prices are in a downtrend 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 $105.00. The next downside price objective for the bears is closing prices below solid technical support at $100.00. First resistance is seen at this week’s high of $101.95 and then at $103.00. First support is seen at today’s low of $99.475 and then at $98.00.
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 should have all your soymeal needs hand-to-mouth. You should also have corn-for-feed needs hand-to-mouth. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $1.475 to $253.225, nearer the daily high. August feeder cattle gained $5.225 to $371.825, nearer the daily high.
Fundamental analysis: The live cattle futures markets bulls climbed back into the saddle today, after a couple sessions of routine profit taking. Supply and demand fundamentals remain bullish USDA at midday today reported very light cash cattle trading taking place at an average price of $255.00. USDA Monday reported last week’s average cash cattle trading price at $255.02. That’s $8.84 above the prior week’s average cash cattle price. The noon report today showed wholesale boxed beef cutout values higher again. Choice-grade was up $1.86 at $393.42, while Select-grade gained $3.91 at $394.51. Movement at midday was 58 loads. The Choice-Select spread at midday today was minus $1.09.
Technical analysis: Cattle futures markets bulls have the solid overall near-term technical advantages. The next upside price objective for the live cattle bulls is to close June futures above resistance at the contract high of $256.625. The next downside technical objective for the bears is closing prices below solid technical support at $240.925. First resistance is seen at today’s high of $254.075 and then at $256.625. First support is seen at this week’s low of $249.40 and then at $247.50.
Feeder cattle bulls are a bit worried that a bearish double-top reversal pattern could be forming on the daily bar chart. 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 the April low of $354.65. First resistance is seen at today’s high of $373.275 and then at $375.00. First support is seen at today’s low of $367.75 and then at this week’s low of $364.00.
What to do: You are hand to mouth for corn for feed needs. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you are hand to mouth for feed needs. You have corn-for-feed needs in the cash market as well. Be prepared to make additional purchases if value prices continue.