Hogs
Price action: December lean hog futures fell $1.05 to $57.55, nearer the session low and hit another contract low early on.
Fundamental analysis: The lean hog futures market saw more technical selling pressure today. The near-term technical posture remains firmly in favor of the bears. Cash hog prices and the CME cash index continue to trend lower.
The latest CME lean hog index is down $0.76 to $64.99. Thursday’s projected CME index price is down $1.06 at $63.93. The national direct five-day rolling average cash hog price quote for today is $50.55. The USDA noon pork report today showed cutout value was down $0.70 at $71.73, led by losses in bellies. Movement at midday was 183.89 loads.
Technical analysis: December lean hog futures see the technical posture as firmly bearish amid a price downtrend in place on the daily chart. However, the market is still short-term oversold, basis the Relative Strength Index. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $62.50. The next downside price objective for the bears is closing prices below solid technical support at $55.00. First resistance is seen at this week’s high of $60.475 and then at $62.275. First support is seen at today’s contract low of $57.10 and then at $56.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You are covered through the end of December for corn-for-feed and covered through November 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 $0.15 to $218.00, near mid-range and hit another six-week low. January feeder cattle fell $2.65 to $325.725, nearer the daily low and hit a four-week low.
Fundamental analysis: The live cattle futures market paused late today after seeing some modest selling pressure early on. Feeder futures saw follow-through technical selling amid the recent price downdrafts in both markets. The near-term technical postures of both markets have significantly deteriorated the past several sessions. Live and feeder cattle futures prices are now starting to trend down on the daily bar charts. USDA today also reported active cattle trading this week at sharply lower levels.
USDA at midday reported active cash trading so far this week, with steers averaging $217.26 and heifers $217.56. USDA on Monday reported cash cattle trading last week averaged $223.65, which was down $3.41 from the week prior. The noon report today showed lower boxed beef prices, with Choice grade down $0.94 at $364.29 and Select grade down $0.58 at $357.79. Movement at midday was 57 loads. The Choice-Select spread is presently plus $6.50.
Technical analysis: December live cattle and November feeders see price downtrends in place on the daily charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at $225.00. The next downside technical objective for the bears is closing prices below solid technical support at the August low of $211.30. First resistance is seen at $220.00 and then at this week’s high of $221.775. First support is seen at $216.00 and then at $215.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at the October high of $348.775. The next downside price objective for the bears is to close prices below solid technical support at $315.00. First resistance is seen at today’s high of $330.075 and then at this week’s high of $334.675. First support is seen at $323.00 and then at $320.00.
What to do: 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.
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 covered through November for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.