Hogs
Price action: December lean hogs fell $2.55 to $78.075, near the daily low and hit a four-month low.
Fundamental analysis: Lean hog futures today saw heavy technical selling. A continued erosion in cash hog prices and weakening pork cutout values late this week also pressured futures prices. Sharply lower live and feeder cattle futures prices today again spilled over into selling in hog futures.
The latest CME lean hog index is down another 4 cents at $89.13. Friday’s projected cash hog index is down 30 cents at $88.83. Today’s national direct 5-day rolling average cash hog price quote is $83.32. The noon report today showed pork cutout value down 66 cents to $95.48, led by losses in loins and butts. Movement at midday was 175.94 loads.
Technical analysis: December lean hog futures bears have the overall near-term technical advantage and gained more power today by restarting a price downtrend 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 this week’s high of $83.25. The next downside price objective for the bears is closing prices below solid technical support at the July low of $77.725. First resistance is seen at $80.00 and then at Wednesday’s high of $82.275. First support is seen at $77.725 and then at $76.00.
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 December in the cash market. For corn, you now have all needs through November covered in the cash market.
Cattle
Price action: December live cattle fell $6.275 to $219.00, near the daily low. January feeder cattle lost $9.025 to $318.45 and near the daily low.
Fundamental analysis: The live and feeder cattle futures bulls late this week are fading fast as strong technical selling pressure from the speculators was featured today, along with lower cash cattle trade so far this week.
Cash cattle trading turned more active today, with USDA at midday today reporting the average steer price at $225.58 and the average heifer price at $226.51. USDA early this week reported cash cattle trading activity last week occurred at an average of $228.70. That’s down $2.16 from the week prior’s USDA average of $230.86. The noon report today showed wholesale boxed beef cutout values lower, with Choice-grade down 28 cents to $374.17, while Select-grade fell $2.14 to $357.80. Movement at midday was70 loads. The Choice-Select spread is presently $16.37.
Technical analysis: The live and feeder cattle futures bears have the overall near-term technical advantage and have regained strength late this week. Prices are in downtrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close December futures above resistance at this week’s high of $229.60. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $218.075. First resistance is seen at $221.00 and then at today’s high of $225.05. First support is seen at $218.075 and then at $215.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at this week’s high of $333.475. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $311.40. First resistance is seen at $322.00 and then at today’s high of $328.875. First support is seen at $315.00 and then at $311.40.
What to do: Cover your corn-for-feed needs in the cash market through November.
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 November covered in the cash market. Be prepared to make additional purchases if value prices continue.