Hogs
Price action: April lean hog futures fell 87 1/2 cents to $95.20, near the daily low and closed at a two-week low close.
Fundamental analysis: Lean hog futures today saw more profit-taking pressure and weak long liquidation as the near-term technical posture of the market is deteriorating. Solidly lower cattle futures prices today also spilled over into selling interest in hog futures.
The latest CME lean hog index is up 10 cents at $90.97. Thursday’s projected cash index price is up another 23 cents at $91.20. The national direct five-day rolling average cash hog price quote today is $70.35. The noon report today showed pork cutout value down 72 cents at $98.38, led by losses in ribs. Movement at midday was decent at 185.08 loads.
Technical analysis: April lean hog futures bulls have the slight overall near-term technical advantage but are fading. The next upside price objective for the hog bulls is to close April futures prices above solid chart resistance at the March high of $97.30. The next downside price objective for the bears is closing prices below solid technical support at the February low of $91.125. First resistance is seen at this week’s high of $96.625 and then at $97.30. First support is seen at this week’s low of $94.10 and then at $93.00.
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 March in the cash market. You should also have corn-for-feed needs purchased through March. Be prepared to make additional purchases.
Cattle
Price action: April live cattle fell $2.225 to $230.15, nearer the daily low. March feeder cattle lost $4.625 to $348.725, near the daily low and closed at a 2.5-month low close.
Fundamental analysis: The cattle futures markets today saw technical selling pressure. Some renewed risk aversion in the general marketplace was evident today, which also kept the cattle market bulls on the sidelines. Lower cash cattle trading prices this week and worries about a JBS labor strike at a Greeley, Co. packing plant are also bearish for futures. USDA at midday today reported very light cash cattle trading at $235.00. The agency Monday reported last week’s average cash cattle trade at $239.94. The noon report today showed wholesale boxed beef cutout values up. Choice-grade was up $1.27 at $395.94, while Select-grade rose $1.85 to $388.62. Movement at midday was 52 loads. The Choice-Select spread at midday today was plus $7.22.
Technical analysis: Recent strong selling pressure in cattle futures produced chart damage to suggest at least near-term market tops are in place. The next upside price objective for the live cattle bulls is to close April futures above resistance at $239.95. The next downside technical objective for the bears is closing prices below solid technical support at $220.00. First resistance is seen at today’s high of $231.80 and then at this week’s high of $233.05. First support is seen at $229.00 and then at this week’s low of $227.325.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $364.825. The next downside price objective for the bears is to close prices below solid technical support at $340.00. First resistance is seen at today’s high of $352.00 and then at this week’s high of $355.45. First support is seen at this week’s low of $346.375 and then at $345.00.
What to do: Cover corn-for-feed needs through March 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 March. You have corn-for-feed needs covered through March as well. Be prepared to make additional purchases if value prices continue.