Hogs
Price action: June lean hog futures rose $0.125 to $105.175, near mid-range.
Fundamental analysis: The lean hog futures market paused today. Weak technicals and declining cash hog and lean hog index prices are limiting buying interest in the hog futures market.
The latest CME lean hog index is down 28 cents at $90.48. Thursday’s projected cash index price is down another 7 cents at $90.41. The national direct five-day rolling average cash hog price quote today is $70.36. The noon report today showed pork cutout value up $0.75 at $97.00, led by gains in ribs and hams. Movement at midday was 130.36 loads.
Technical analysis: April lean hog futures bears have the near-term technical advantage and are working to restart a price 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 $108.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $102.95. First resistance is seen at today’s high of $105.75 and then at this week’s high of $107.35. First support is seen at $104.00 and then at $103.00.
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 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 $1.075 to $244.35, nearer the daily high and hit a contract high. May feeder cattle gained $1.525 to $368.00, near mid-range and hit a 5.5-month high early on.
Fundamental analysis: The cattle futures markets bulls are keeping their foot on the gas amid solid chart-based buying interest from the speculators. Improved risk appetite in the general marketplace at midweek also supported the cattle futures bulls.
Very light cattle trading was reported by USDA at midday today, at $238.00. That’s well above what the agency on Monday reported for cash cattle trading last week-- averaging $235.69. The noon report today showed wholesale boxed beef cutout values a bit weaker. Choice-grade was down $0.69 at $394.80, while Select-grade was down $0.30 at $392.63. Movement at midday was good at 73 loads. The Choice-Select spread at midday today was plus $2.17.
Technical analysis: Cattle futures markets bulls are enjoying solid price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at $247.50. The next downside technical objective for the bears is closing prices below solid technical support at $235.00. First resistance is seen at $245.00 and then at $246.00. First support is seen at $242.00 and then at $240.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $376.625. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at $371.00 and then at $373.00. First support is seen at today’s low of $365.50 and then at $362.50.
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.