Editor’s note: Markets will be closed Thursday for the New Year’s Day holiday. Pro Farmer will be observing an abbreviated schedule on Wednesday and Friday, publishing First Thing Today (8:00 a.m. CT) and After the Bell (Post-close). We will resume our regular publishing schedule on Monday, Jan. 5.
Hogs
Price action: February lean hog futures rose 97 1/2 cents to $85.45, nearer the session high.
Fundamental analysis: Lean hog futures today saw a resumption of technical buying as prices are in an uptrend on the daily bar chart. The February lean hog futures contract is well above the latest CME lean hog index, which is bullish for futures and suggests futures traders expect the cash hog market to continue to appreciate.
The latest CME lean hog index is down $1.40 to $82.44. Wednesday’s projected cash index price is down 19 cents at $82.25. Today’s national direct 5-day rolling average cash hog price quote was unavailable. The noon report today showed pork cutout value down 41 cents at $95.55, led by losses in butts, picnics and bellies. Movement at midday was 184.16 loads.
Technical analysis: February lean hog futures bulls have the overall near-term technical advantage. Prices are trending up on the daily chart. The next upside price objective for the hog bulls is to close February futures prices above solid chart resistance at $88.00. The next downside price objective for the bears is closing prices below solid technical support at $82.40. First resistance is seen at the December high of $86.225 and then at $87.50. First support is seen at today’s low of $84.425 and then at last week’s low of $83.825.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through February in the cash market. You should also have corn-for-feed needs purchased through February. Be prepared to make additional purchases.
Cattle
Price action: February live cattle rose $1.50 to $230.475, nearer the daily high. January feeder cattle gained $2.55 to $349.55, nearer the session high and hit another nine-week high.
Fundamental analysis: The live cattle futures market today saw more technical buying from the chart-based speculators. The near-term chart postures for live and feeder cattle futures remain in favor of the bulls. Higher cash cattle prices fetched last week also supported buying interest in futures today.
USDA Monday reported last week’s average cash cattle trade at $229.33—up $1.36 from the week prior. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade down 82 cents at $348.51, while Select-grade 6 rose cents to $345.68. Movement at midday was decent at 93 loads. The Choice-Select spread has narrowed to $2.83.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage. Price uptrends are in place on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above resistance at $235.00. The next downside technical objective for the bears is closing prices below solid technical support at $225.00. First resistance is seen at last week’s high of $232.325 and then at $233.425. First support is seen at today’s low of $228.425 and then at $226.85.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $356.875, which is the top of a downside price gap on the daily bar chart. The next downside price objective for the bears is to close prices below solid technical support at $337.00. First resistance is seen at $351.00 and then at $353.00. First support is seen at today’s low of $346.50 and then at this week’s low of $344.775.
What to do: Cover corn-for-feed needs through February 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 February. You have corn-for-feed needs covered through February as well. Be prepared to make additional purchases if value prices continue.