Hogs
Price action: December lean hogs fell $1.625 to $88.725, near the session low.
Fundamental analysis: The lean hog futures market saw more routine profit-taking pressure following recent gains that saw December hogs hit a contract high last Friday. The bulls are still strong but do not want to see more selling pressure Wednesday that would mark three down days in a row and begin to suggest a market top is in place. Futures’ discounts to the cash hog index should continue to limit selling interest in futures. However, cash and fresh pork fundamentals are starting to weaken.
The latest CME lean hog index is down 5 cents at $104.78. Wednesday’s projected cash hog index is down 5 cents at $104.73. Today’s national direct 5-day rolling average cash hog price quote is $103.14, down over $1.00 from Monday’s quote.. The noon report today showed pork cutout value up 2 cents to $112.24. Movement at midday was 152.67 loads.
Technical analysis: December lean hog futures bulls still have the solid overall near-term technical advantage. A 2.5-month-old price uptrend remains in place on the daily bar chart. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $95.00. The next downside price objective for the bears is closing prices below solid technical support at $86.525. First resistance is seen at today’s high of $90.475 and then at the contract high of $91.525. First support is seen at today’s low of $88.60 and then at $87.875.
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 December in the cash market. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: December live cattle rose 95 cents to $234.775, near the daily high. November feeder cattle gained $5.475 to $359.35 and near the daily high.
Fundamental analysis: The feeder cattle futures market showed very good strength today, while live cattle futures showed more modest strength. Feeders were boosted by ongoing tight cattle supplies as the New World Screwworm matter continues to keep Mexican cattle out of the U.S.
The cattle and fresh beef market fundamentals have weakened recently. Consumer sentiment has also deteriorated the past week as the U.S. government is on the verge of a shutdown at midnight and the Trump administration threatening mass firings in federal agencies if a shutdown occurs. Also, the latest U.S. consumer confidence reading today came in at a five-month low. That could keep the cattle futures bulls more tentative the rest of this week.
USDA Monday reported cash cattle trading last week averaged $232.65, down $4.86 from the week prior. No cash cattle trading has been reported so far this week. The noon report today showed wholesale boxed beef cutout values weaker, with Choice-grade down 5 cents to $370.63, while Select fell $2.06 to $346.83. Movement at midday was decent at 69 loads. The Choice-Select spread is presently $23.80.
Technical analysis: The live and feeder cattle futures bulls have faded recently to suggest major market tops are in place. The next upside price objective for the live cattle bulls is to close December futures above resistance at last week’s high of $241.35. The next downside technical objective for the bears is closing prices below solid technical support at the September low of $230.075. First resistance is seen at this week’s high of $235.10 and then at $236.50. First support is seen at today’s low of $231.75 and then at $230.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at last week’s high of $363.775. The next downside price objective for the bears is to close prices below solid technical support at the September low of $342.125. First resistance is seen at $363.775 and then at $365.00. First support is seen at $357.00 and then at $355.00.
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 December. For corn, you have all needs through October covered in the cash market. Be prepared to make additional purchases if value prices continue.