Hogs
Price action: August lean hog futures rose $0.075 to $100.925, near the daily high.
Fundamental analysis: The lean hog futures market paused today following decent gains Wednesday. Buying interest in lean hog futures continues to be squelched by the near-term technical posture remaining firmly bearish. Prices are still in a steep downtrend on the daily bar chart.
The latest CME lean hog index is down 12 cents at $90.58. Friday’s projected cash index price is up 34 cents at $90.92. The national direct five-day rolling average cash hog price quote today is $94.30. The noon report today showed pork cutout value up $2.37 at $100.72. Movement at midday was good at 227.36 loads.
Technical analysis: August lean hog futures bears have the solid overall near-term technical advantage. Prices are in a steep 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 $106.00. The next downside price objective for the bears is closing prices below solid technical support at $97.50. First resistance is seen at $102.00 and then at $103.00. First support is seen at today’s low of $99.875 and then at this week’s low of $98.55.
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 and corn-for-feed needs covered in the cash market through May. Be prepared to make additional purchases.
Cattle
Price action: August live cattle fell $1.50 to $241.00, near the daily low. August feeder cattle lost $1.60 to $353.025, near the daily low.
Fundamental analysis: The cattle futures markets sold off late today, on profit taking and weak long liquidation. The bulls had been working prices up from their May lows but took a step backward today. Key for the bulls will be to show more price strength, or at least stability, in the coming sessions. It could be that feeder futures will lead live cattle in daily price direction in the near term.
Unusually warm to hot temperatures this week in the Northern Plains will promote some livestock stress, though some cooling will occur this weekend.
USDA at midday today reported cash cattle trading so far this week has picked up today, at solidly higher price levels, with steers averaging $264.35 and heifers $263.68. The agency earlier this week reported cash cattle trading last week averaged $258.77, down $4.08 from the week prior’s record high of $262.85. The noon report today showed wholesale boxed beef cutout values lower. Choice-grade was down $2.23 at $392.49, while Select-grade lost $1.96 to $387.33. Movement at midday was 57 loads. The Choice-Select spread at midday today was plus $5.16.
Technical analysis: Live cattle futures bulls still have the overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close August futures above resistance at the contract high of $251.65. The next downside technical objective for the bears is closing prices below solid technical support at $230.00. First resistance is seen at this week’s high of $243.875 and then at $245.00. First support is seen at $240.00 and then at $238.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at last week’s high of $366.125. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $344.275. First resistance is seen at $356.525 and then at $358.00. First support is seen at Wednesday’s low of $350.225 and then at this week’s low of $347.40.
What to do: Cover corn-for-feed and soymeal needs through May in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn and soymeal for feed needs covered in the cash market through May. Be prepared to make additional purchases if value prices continue.