Hogs
Price action: June lean hog futures fell $0.225 to $101.975, nearer the daily high.
Fundamental analysis: The lean hog futures market saw mild short covering and perceived bargain hunting early on today but gave up those mild gains to end the day. Strong gains in the cattle futures markets again today limited selling interest in hog futures.
The latest CME lean hog index is down 18 cents at $91.26. Wednesday’s projected cash index price is down another 7 cents at $91.18. The national direct five-day rolling average cash hog price quote today is $90.73. The noon report today showed pork cutout value up $0.72 to $99.95, led by gains in bellies. Movement at midday was 156.87 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 last week’s high of $103.775 and then at $105.00. First support is seen at today’s low of $101.10 and then at the April low of $100.175.
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 rose $4.55 to $253.50, near the session high and hit a contract and record high. May feeder cattle gained $4.275 to $371.725, near the daily high.
Fundamental analysis: The cattle futures markets saw a second straight session of very strong gains that put the bulls back in firm technical control. Today’s big gains were especially impressive given the keener risk aversion in the general marketplace today, as seen by lower stock index prices.
USDA at midday today reported no cash cattle trading yet this week. Last week’s cash cattle price fetched an average price of $246.18, which is down$1.86 from the prior week’s average trade of $248.02. The noon report today showed wholesale boxed beef cutout values weaker. Choice-grade was down $0.38 at $389.18, while Select-grade lost $1.31 at $387.29. Movement at midday was 52 loads. The Choice-Select spread at midday today was plus $1.89.
Technical analysis: Cattle futures markets bulls are back in business with this week’s strong gains. The next upside price objective for the live cattle bulls is to close June futures above resistance at $257.50. The next downside technical objective for the bears is closing prices below solid technical support at $245.00. First resistance is seen at $254.00 and then at $255.00. First support is seen at $250.00 and then at today’s low of $248.55.
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 last week’s low of $354.05. First resistance is seen at $372.50 and then at $375.00. First support is seen at today’s low of $365.75 and then at this week’s low of $360.90.
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.