Hogs
Price action: June lean hog futures gained $3.225 to $107.70, nearer the session high and hit a three-week high.
Fundamental analysis: The lean hog futures market was boosted today by the rally to new for-the-move highs in the cattle futures markets and somewhat improved trader/investor risk appetite in the general marketplace. Seasonal factors also favor the lean hog futures bulls at present.
The latest CME lean hog index is down 40 cents at $90.01. Tuesday’s projected cash index price is down another 8 cents at $89.93. The national direct five-day rolling average cash hog price quote today is $69.50. The noon report today showed pork cutout value up $0.80 at $99.75, led by gains in picnics and ribs. Movement at midday was light at 94.03 loads.
Technical analysis: April lean hog futures bulls and bears are back on a level overall near-term technical playing field and the bulls gained some momentum today. The next upside price objective for the hog bulls is to close June futures prices above solid chart resistance at $110.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $102.95. First resistance is seen at last week’s high of $107.35 and then at $108.005. First support is seen at $106.00 and then at $105.00.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You should have all your soymeal needs covered through April in the cash market. You should also have corn-for-feed needs purchased through April. Be prepared to make additional purchases.
Cattle
Price action: June live cattle rose $0.70 to $247.025, near mid-range and hit a contract high. May feeder cattle fell $0.275 to $370.35, near mid-range and hit a 5.5-month high early on.
Fundamental analysis: The live cattle futures market continued to rally today amid sharply higher cash cattle prices, while feeder cattle traders took a pause. Both markets are supported by bullish charts that are inviting speculators to the long sides. Somewhat improved trader/investor risk appetite in the general marketplace early this week supported the cattle futures bulls.
USDA at midday today reported cash cattle trading last week averaged $244.96. That’s $9.27 higher than the week-prior’s average of $235.69. The noon report today showed wholesale boxed beef cutout values firmer. Choice-grade was up $1.18 at $388.96, while Select-grade was up $2.12 at $388.31. Movement at midday was light at 33 loads. The Choice-Select spread at midday today was plus $0.65.
Technical analysis: Cattle futures markets bulls are enjoying solid price uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close June futures above resistance at $250.00. The next downside technical objective for the bears is closing prices below solid technical support at $239.00. First resistance is seen at today’s contract high of $248.45 and then at $250.00. First support is seen at $245.00 and then at $242.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $376.625. The next downside price objective for the bears is to close prices below solid technical support at $355.00. First resistance is seen at today’s high of $372.625 and then at $374.00. First support is seen at today’s low of $369.00 and then at $367.00.
What to do: Cover corn-for-feed needs through April in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through April. You have corn-for-feed needs covered through April as well. Be prepared to make additional purchases if value prices continue.