Hogs
Price action: April lean hog futures fell $1.225 to $95.50, near the session low.
Fundamental analysis: Lean hog futures today saw more profit-taking pressure from the shorter-term traders, as well as some fresh short-selling from the technical traders. While the charts remain overall bullish, recent price action suggests the bulls are exhausted.
The latest CME lean hog index is down 11 cents at $86.46. Wednesday’s projected cash index price is down 15 cents at $86.32. The national direct five-day rolling average cash hog price quote today is $64.27. The noon report today showed pork cutout value up 57 cents at $96.40, led by gains in hams. Movement at midday was decent at 180.09 loads.
Technical analysis: April lean hog futures bulls still have the overall near-term technical advantage but are fading a bit. Prices are still in an uptrend on the daily bar chart but that uptrend is now in some jeopardy. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at $100.00. The next downside price objective for the bears is closing prices below solid technical support at $92.50. First resistance is seen at this week’s high of $97.625 and then at $87.875—the top of Monday’s downside price gap on the daily bar chart. First support is seen at $95.00 and then at $94.00.
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 March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle fell 77 1/2 cents to $237.425, nearer the daily low. March feeder cattle lost $2.675 to $364.775, nearer the session low.
Fundamental analysis: The live cattle and feeder cattle futures markets saw some profit-taking pressure today. The charts are suggesting the cattle futures bulls may be getting tired after the rallies from the November lows. Price uptrends on the daily bar charts may be rolling over.
USDA today reported no active cash cattle trading. Cash trading last week averaged $241.31, up $1.87 from prior week’s average cash cattle trade at $239.44. The noon report today showed wholesale boxed beef cutout values mixed. Choice-grade was up $2.24 at $370.00, while Select-grade fell 82 cents to $364.53. Movement at midday was decent at 74 loads. The Choice-Select spread at midday today was plus $5.47.
Technical analysis: The live and feeder cattle futures bulls still have the overall near-term technical advantage amid price uptrends in place on the daily bar charts. However, the bulls appear tired and price uptrends on the daily charts may be stalling out. The next upside price objective for the live cattle bulls is to close April futures above resistance at the contract high of $250.925. The next downside technical objective for the bears is closing prices below solid technical support at the January low of $231.275. First resistance is seen at this week’s high of $239.40 and then at $241.00. First support is seen at last Friday’s low of $236.475 and then at last week’s low of $234.55.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at the contract high of $378.60. The next downside price objective for the bears is to close prices below solid technical support at $353.00. First resistance is seen at today’s high of $368.325 and then at $370.00. First support is seen at $362.00 and then at last week’s low of $360.825.
What to do: Cover corn-for-feed needs through March 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 March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.