Hogs
Price action: December lean hogs fell 87 1/2 cents to $82.40, nearer the session low.
Fundamental analysis: The lean hog futures market saw technical selling pressure today after prices hit a two-month low Tuesday. Falling cash hog market prices are also prompting selling in futures. December futures’ discount to the cash market did somewhat limit losses in futures. Sharply lower to limit-down cattle futures markets prices today also weighed on hogs.
The latest CME lean hog index is down another 60 cents at $94.98. Thursday’s projected cash hog index is down another 80 cents at $94.18. Today’s national direct 5-day rolling average cash hog price quote is $89.49. The noon report today showed pork cutout value up $1.25 to $101.84. Movement at midday was 179.29 loads.
Technical analysis: December lean hog futures bears have the firm overall near-term technical advantage. Prices are in a steep 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 $86.00. The next downside price objective for the bears is closing prices below solid technical support at $80.00. First resistance is seen at this week’s high of $83.425 and then at $84.45. First support is seen at this week’s low of $82.025 and then at $81.00.
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 October covered in the cash market.
Cattle
Price action: December live cattle fell $5.60 to $239.825, near the daily low and hit a two-week low. January feeder cattle fell the daily trading limit of $9.25 to $361.025 and hit a two-week low. Live cattle and feeder cattle futures’ daily trading limits will be expanded Thursday.
Fundamental analysis: The live and feeder cattle futures markets were already under selling pressure near midday and that selling accelerated in late trading after President Trump made a social media post: “The Cattle Ranchers, who I love, don’t understand that the only reason they are doing so well, for the first time in decades, is because I put Tariffs on cattle coming into the United States, including a 50% Tariff on Brazil. If it weren’t for me, they would be doing just as they’ve done for the past 20 years — Terrible! It would be nice if they would understand that, but they also have to get their prices down, because the consumer is a very big factor in my thinking, also!” Trump shortly thereafter posted: “In addition to everything else, Tariffs on other Countries SAVED our Cattle Ranchers!”
Profit-taking pressure today and some risk aversion that re-entered the marketplace following reports the Trump administration is considering more trade levies on China also worked to press the cattle futures markets lower early on.
USDA at midday today reported very light cash cattle trade at $238.00 so far this week. USDA reported last week’s average cash cattle trade at $239.82. The noon report today showed wholesale boxed beef cutout values mixed, with Choice-grade down $1.21 to $370.72, while Select rose 41 cents to $352.98. Movement at midday was solid at 104 loads. The Choice-Select spread is presently $17.74.
Technical analysis: The live and feeder cattle futures bulls have the overall near-term technical advantage. The next upside price objective for the live cattle bulls is to close December futures above resistance at the contract high of $248.30. The next downside technical objective for the bears is closing prices below solid technical support at $235.00. First resistance is seen at $242.00 and then at $244.00. First support is seen at today’s low of $238.525 and then at $237.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $376.75, which is the top of a downside price gap on the daily chart. The next downside price objective for the bears is to close prices below solid technical support at $350.00. First resistance is seen at $364.00 and then at $367.00. First support is seen at $360.00 and then at $357.50.
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.