Hogs
Price action: June lean hogs fell 27 1/2 cents to $89.775, nearer the daily low.
Fundamental analysis: Lean hog futures saw buying interest limited by bearish charts that continue to bring speculative sellers into the market. Meanwhile, the speculative bulls are still leery due to the recent stock and financial market turmoil and volatility. The direct hog market continues to trade below the negotiated market, suggesting the cash hog market is likely to continue to weaken. The latest CME lean hog index is down another 17 cents to $88.19 as of April 4. Wednesday’s index is projected down another 3 cents to $88.16. The national direct five-day rolling average cash hog price quote today is $88.13. The noon report today showed pork cutout value fell $1.16 to $96.11 amid losses in picnics and hams. Bellies continued to show strength and gained over $5.00 at midday. Movement at midday was good at 173.94 loads.
Technical analysis: Lean hog futures bears have the solid overall near-term technical advantage. Prices are trending lower on the daily bar chart. The next upside price objective for the hog bulls is to close June prices above solid chart resistance at $95.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $86.325. First resistance is seen at this week’s high of $92.65 and then at $94.00. First support is seen at this week’s low of $88.70 and then at $88.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all corn-for-feed needs covered in the cash market through April. You have all soymeal needs covered in the cash market through May.
Cattle
Price action: June live cattle futures fell 55 cents to $193.625 and settled near session lows. Nearby April futures inched 17.5 cents higher to $199.10. May feeder cattle climbed 45 cents to $271.725.
Fundamental analysis: Cattle futures continue to see spillover volatility, opening higher but seeing resurgent, sustained selling pressure later in the session. Reports of weaker cash trade to start the week likely weighed heavily on fats futures as well. In Kansas, 83 head traded hands at $204 while another 35 head traded hands at $208 in Iowa/Minnesota. That average of $205.19 is well below last week’s five-area average of $211.14. That confirmation of lower cash cattle trade emboldened traders to continue pushing futures lower despite oversold conditions plaguing the futures market with the idea a market top is in place. While tariffs might have a marginal impact on beef demand, the supply side of the market remains tight. It seems at this juncture that the cattle market was looking for a catalyst to break lower and tariff driven selling came at the right time to make that happen. Still, steep discounts to the cash market should limit the downside.
Beef cutout ended yesterday higher and pushed higher again this morning. Choice cutout is up another 3 cents to $339.53 while Select surged $5.09 to $324.39, narrowing the Choice/Select spread to $15.14.
Technical analysis: June live cattle futures opened higher but struggled to see any followthrough strength. Bears retain a modest technical advantage though prices are still near oversold on the daily bar chart. Continued selling finds support at the 100-day moving average at $193.25, which is reinforced by support at $192.25. Bulls are seeking to overcome psychological $195.00 resistance before challenging the 40-day moving average at $198.00.
May feeder futures saw modest gains after opening solidly higher. Prices closed nearer yesterday’s close as bears retain a modest technical advantage. Support stands at the 100-day moving average at $269.50, which is bolstered by yesterday’s low of $267.20. Bulls are looking to challenge resistance at $273.975 before tackling the psychological $275.00 mark.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have all corn-for-feed needs covered in the cash market through April. You have all soymeal needs covered in the cash market through May.