Hogs
Price action: June lean hog futures settled 22.5 cents lower at $99.925 but did end the day on session highs.
Fundamental outlook: Leans hogs opened lower this morning but clawed back most of this morning’s losses as the session went on. Volume was pretty light today in June lean hogs. A favorable risk-on tone in the marketplace helped fuel resurgent strength in hog futures this morning. A lot of the negative news regarding tariffs seems to be baked into the marketplace, noted by equity futures posting strong gains today despite China denying claims that trade talks are occurring at all had little effect on the general marketplace, though likely did weigh on hog futures at the open. The CME lean hog index continues to work higher, rising 67 cents to $86.75 as of April 22. The preliminary calculation puts the index up another 52 cents to $87.27 tomorrow. There was not much trade occurring in the negotiated market yesterday, which will make today’s trade key. Pork cutout recouped a portion of yesterday’s losses this morning, rising 83 cents to $94.91. Gains in ribs and loins led cutout higher in a.m. trade.
Technical outlook: June lean hogs gapped lower on this morning’s open but rebounded and closed on session highs. Bulls continue to maintain the technical advantage and are looking to close prices back above psychological $100.00 resistance, which is reinforced by yesterday’s high of $101.425. Support comes in at today’s low of $98.60 on a reversal back lower, which is quickly backed by the 100-day moving average at $97.80.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: NEW ADVICE -- Extend corn-for-feed coverage by one month in the cash market through May. You also have all soymeal needs covered in the cash market through May.
Cattle
Price action: June live cattle fell 10 cents to $208.00 and nearer the session high. May feeder cattle rose 72 1/2 cents to $289.075, nearer the daily high and hit a four-week high.
Fundamental analysis: The live cattle futures market paused today after recent solid gains that have come amid a marked improvement in trader and investor risk appetite in the general marketplace, on news the U.S. and China are engaging in trade talks.
Cattle and beef market fundamentals remain solid. USDA today reported that light steer and heifer cash trade has occurred so far this week, at around $211.50. That compares to the average cash cattle price fetched last week at $211.63. Packers want to buy cattle at lower prices due to highly negative cutting margins. Feedlots are hopeful for overall higher prices again this week after a$3.93 jump last week. The noon report today showed wholesale boxed beef values up, with Choice-grade gaining $1.38 to $333.35 and Select-grade up $1.40 at $315.92. The Choice-Select spread is presently $17.43. Movement at midday was 59 loads.
USDA will detail frozen meat stocks at the end of March in this afternoon’s Cold Storage Report. The five-year average is a 10.7-million-lb. decline in beef stocks.
Technical analysis: Live and feeder cattle futures bulls have the solid overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close June futures above resistance at $210.00. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at Wednesday’s contract high of $208.80 and then at $210.00. First support is seen at $206.00 and then at $205.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $290.625. The next downside price objective for the bears is to close prices below solid technical support at $280.00. First resistance is seen at today’s high of $289.50 and then at $290.625. First support is seen at $287.00 and then at this week’s low of $285.10.
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 should have all corn-for-feed needs covered in the cash market through May. You also have all soymeal needs covered in the cash market through May.