Hogs
Price action: April lean hog futures rose 5 cents to $93.50, nearer the daily low.
Fundamental analysis: Lean hog futures today paused as bulls work to stabilize the market after recent selling pressure. Today’s meager advance in hog futures amid solid gains in the cattle futures is not a good sign for hogs. The near-term technical posture of the lean hog futures market has deteriorated.
The latest CME lean hog index is up 16 cents at $91.60. Tuesday’s projected cash index price is up another 16 cents at $91.76. The national direct five-day rolling average cash hog price quote today is $69.80. The noon report today showed pork cutout value up $1,.92 at $102.11, led by gains across the board. Movement at midday was 127.82 loads.
Technical analysis: April lean hog futures bulls have faded. Prices are now in a fledgling downtrend on the daily bar chart. 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 $95.00 and then at $96.00. First support is seen at last week’s low of $93.10 and then at $92.00.
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 rose $2.925 to $231.875, nearer the daily high. March feeder cattle gained $5.975 to $355.45, near the daily high.
Fundamental analysis: The cattle futures markets today saw good corrective rebounds and perceived bargain hunting from recent selling pressure. Short covering was also featured today. Lower crude oil prices and better risk appetite in the general marketplace was also a positive for the cattle futures markets today.
Work stopped at the Greeley, Colorado JBS facility today amid a union strike. The company is shifting cattle deliveries to facilities in Grand Island, NE and Cactus, TX. Cattle traders will continue to closely monitor this situation.
USDA at midday today reported lower cash cattle trading last week, with the average price of $234.83—down $5.11 from the week prior. The noon report today showed wholesale boxed beef cutout values up again. Choice-grade was up $4.03 at $401.95, while Select-grade rose $3.27 to $394.81. Movement at midday was light at 32 loads. The Choice-Select spread at midday today was plus $7.14.
In the Plains states, high temperatures will reach the lower 100’s in some places in the southwest this Friday and Saturday. The heat will notably stress livestock, especially after the rapid change from early-week unusually cold weather.
Technical analysis: Cattle futures markets are still in price downtrends on the daily bar charts. 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 last week’s low of $227.325. First resistance is seen at $234.00 and then at $235.00. First support is seen at today’s low of $230.825 and then at $228.825.
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 $357.50 and then at $360.00. First support is seen at today’s low of $350.625 and then at last week’s low of $345.55.
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.