Hogs
Price action: October lean hog futures rose $0.05 to $78.15, nearer the daily low.
Fundamental analysis: The lean hog futures market saw tepid short covering for much of the session today, following the recent steep price downdraft that saw prices hit a 15-month low Friday. Bulls are still on shaky technical ground, as evidenced by today’s low-range close that saw most of the early gains given up. The near-term chart posture remains firmly bearish. A weakening cash hog market also is negative for lean hog futures.
The latest CME lean hog index is down $1.00 at $84.02. Tuesday’s projected CME index price is down another 60 cents at $83.42. The national direct five-day rolling average cash hog price quote for today is $83.37. The USDA’s noon pork report today showed cutout value was up $2.33 at $89.31, led by loins and bellies. Movement at midday was 169.94 loads.
Technical analysis: October lean hog futures still see the technical posture as firmly bearish. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $81.475, which is the top of a downside price gap on the daily bar chart.. The next downside price objective for the bears is closing prices below solid technical support at $75.00. First resistance is seen at $80.00 and then at $81.375. First support is seen at last week’s low of $77.975 and then at $77.00.
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 and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle rose $5.025 to $220.95, near the daily high. November feeder cattle gained $8.10 to $326.10, near the session high.
Fundamental analysis: The live and feeder cattle futures markets today saw solid buying interest following last Friday afternoon’s bullish USDA monthly cattle-on-feed report that showed record-low placements. Solid gains in boxed beef prices at midday also supported buying interest in futures. Short covering and perceived bargain hunting from the speculators was featured today.
USDA at midday today reported cash cattle trading averaged $221.87 down 95 cents from $222.82 the week prior. The noon report today showed strong gains in boxed beef prices, with Choice grade up $5.50 at $377.44 and Select grade up $3.59 at $356.85. Movement at midday was light at 27 loads. The Choice-Select spread is presently plus $20.59.
Technical analysis: Cattle futures prices gapped higher on the daily bar charts today, to give the bulls fresh momentum. The next upside price objective for the live cattle bulls is to close October futures above resistance at the August high of $230.325. The next downside technical objective for the bears is closing prices below solid technical support at $214.00. First resistance is seen at today’s high of $221.225 and then at last week’s high of $222.825. First support is seen at today’s low of $218.025 and then at $216.75.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at the September high of $333.325. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at today’s high of $327.025 and then at $330.00. First support is seen at $323.00 and then at $320.475.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.