Hogs
Price action: December lean hog futures rose $0.50 to $66.575, near the daily high after hitting a contract low early on.
Fundamental analysis: The lean hog futures market saw tepid short covering in a bear market today. Overall, charts are still bearish, highlighted by a downtrend that remains in place on the daily bar chart. However, the market is still short-term oversold and due for a better corrective bounce soon. Cash hog market and CME cash index prices continue to trend lower.
The latest CME lean hog index is down $0.19 at $75.75. Friday’s projected CME index price is down $0.66 at $75.09. The national direct five-day rolling average cash hog price quote for today is $70.89. The USDA noon pork report today showed cutout value was down $0.72 at $78.73, led by declines in ribs. Movement at midday was 137.93 loads.
Technical analysis: December lean hog futures see the technical posture as overall bearish. However, prices are still short-term oversold. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $70.00. The next downside price objective for the bears is closing prices below solid technical support at $65.00. First resistance is seen at Wednesday’s high of $67.60 and then at this week’s high of $69.00. First support is seen at today’s contract low of $65.80 and then at $65.00.
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 rose $2.125 to $227.25, near the daily high and hit a nine-week high. November feeder cattle rose $3.50 to $341.95, near the daily high.
Fundamental analysis: The live and feeder cattle futures markets saw renewed technical buying today as the near-term charts remain bullish amid price uptrend in place. Longer-term supply and demand fundamentals remain bullish, too.
USDA today reported still no cash cattle so far this week. The agency on Monday said cash cattle trading last week averaged $220.14 up 34 cents from the week-prior average of $219.80. The noon report today showed losses in boxed beef prices, with Choice grade down $0.78 at $375.72 and Select grade down $3.63 at $354.84. Movement at midday was 69 loads. The Choice-Select spread is presently plus $20.88.
In the U.S. Northern Plains, fluctuating temperatures are expected to occur across much of the crop region in the coming days. Some livestock stress may occur due to erratic swings in temperatures--particularly in Montana, where temperatures will shift from the low 20s to mid-70s Friday into Saturday.
Technical analysis: December live cattle and November feeders bulls have the 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 the August high of $229.425. The next downside technical objective for the bears is closing prices below solid technical support at $220.00. First resistance is seen at today’s high of $227.90 and then at $228.425. First support is seen at this week’s low of $224.95 and then at $223.30.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $350.00. The next downside price objective for the bears is to close prices below solid technical support at $325.00. First resistance is seen at this week’s high of $342.50 and then at $344.00. First support is seen at this week’s low of $338.05 and then at $335.00.
What to do: You are now hand to mouth on all corn-for-feed and soymeal needs. Be prepared to make additional purchases if value levels present themselves.
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.