Hogs
Price action: December lean hog futures fell $0.575 to $66.35, near the daily low and not far above last week’s contract low.
Fundamental analysis: The lean hog futures market saw more technical selling today. Overall, charts are still bearish, highlighted by a downtrend that remains in place on the daily bar chart. Cash hog market and CME cash index prices continue to trend lower.
The latest CME lean hog index is down $0.90 at $74.19. Tuesday’s projected CME index price is down $0.79 at $73.40. The national direct five-day rolling average cash hog price quote for today is $70.68. The USDA noon pork report today showed cutout value was down $1.35 at $79.20, led by declines in bellies. Movement at midday was 147.65 loads.
Technical analysis: December lean hog futures see the technical posture as overall bearish amid a price downtrend in place on the daily chart. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $70.00. The next downside price objective for the bears is closing prices below solid technical support at $62.50. First resistance is seen at today’s high of $67.70 and then at last week’s high of $69.00. First support is seen at the contract low of $65.80 and then at $65.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed needs covered through the end of December, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle fell $0.325 to $228.025, nearer the daily high. November feeder cattle rose $2.025 to $343.925, near the daily high and hit a three-month high.
Fundamental analysis: The live cattle futures market paused and saw mild profit taking today, amid a price uptrend in place on the daily bar chart. Feeder cattle futures saw technical buying today as prices are also trending up on the daily chart. Solidly higher cash cattle trading last week limited selling interest in futures markets today. Longer-term supply and demand fundamentals remain bullish for the cattle and beef markets, too.
USDA today reported cash cattle trading last week averaged $224.19, up $4.05 from the week-prior average. The noon report today showed mixed boxed beef prices, with Choice grade down $0.57 at $371.74 and Select grade up $8.00 at $361.05. Movement at midday was light at 38 loads. The Choice-Select spread is presently plus $10.69.
Technical analysis: December live cattle and November feeders bulls have the near-term technical advantage and are seeing prices trending up on their daily charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at the August high of $229.425. The next downside technical objective for the bears is closing prices below solid technical support at $222.50. First resistance is seen at last week’s high of $228.75 and then at $229.425. First support is seen at $227.00 and then at $226.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $350.00. The next downside price objective for the bears is to close prices below solid technical support at $330.00. First resistance is seen at $345.00 and then at $347.50. First support is seen at $340.00 and then at last week’s low of $338.05.
What to do: You are now hand to mouth on all corn-for-feed and soymeal needs. Be prepared to make additional purchases if value levels present themselves.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are covered through the end of December for corn-for-feed, and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.