Hogs
Price action: October lean hogs rose 52 1/2 cents to $95.55, near mid-range and hit a nine-week high.
Fundamental analysis: The lean hog futures market saw modest technical buying from the speculators featured today, amid firmly bullish near-technical charts. Gains were somewhat limited by a risk-off trading day in the general marketplace, as the U.S. stock market posted solid losses.
The latest CME lean hog index price quote today (for Aug. 28) is down 26 cents at $106.17. Wednesday’s CME index price is projected down 25 cents at $105.92. Today’s national direct 5-day rolling average cash hog price quote is $108.77. The noon pork report today showed cutout value up 97 cents to $115.29, led by gains in hams and bellies. Movement at midday was 150.53 loads. Pork packer margins are presently reported to be slightly in the black.
Technical analysis: Lean hog futures bulls have the solid overall near-term technical advantage. A choppy, six-week-old price uptrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at the contract high of $97.05. The next downside price objective for the bears is closing prices below solid technical support at $91.00. First resistance is seen at today’s high of $96.00 and then at $97.05. First support is seen at $94.00 and then at $93.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: October live cattle fell 12 1/2 cents to $239.525, near mid-range. September feeder cattle lost 52 1/2 cents to $364.25, nearer the daily low.
Fundamental analysis: The live and feeder cattle futures bulls showed modest follow-through buying strength early on today, following gains last Friday. However, buying interest faded later today due to a keener risk-off trading day in the general marketplace that saw the U.S. stock indexes sell off sharply. Lower boxed beef prices at noon were also negative for trading action later in the session. The noon report today showed weaker boxed beef cutout values, with Choice-grade down $1.67 at $413.74 and Select-grade down $2.82 at 387.18. Beef packer margins are presently reported to be solidly in the black. Movement at midday was 53 loads. The Choice-Select spread is presently $26.56. The average cash cattle trading price last week was reported today by USDA at $243.60, which is down slightly from last week’s average price of $244.25.
Technical analysis: Live and feeder cattle futures bulls have the strong overall near-term technical advantage. Prices are in nine-week-old uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close October futures above resistance at $245.00. The next downside technical objective for the bears is closing prices below solid technical support at $232.50. First resistance is seen at the contract high of $242.075 and then at $243.00. First support is seen at $238.00 and then at $235.95.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $375.00. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $354.525. First resistance is seen at today’s high of $367.70 and then at the contract high of $370.00. First support is seen at today’s low of $361.95 and then at $360.00.
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: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.