Hogs
Price action: October lean hog futures fell $0.675 to $80.45, nearer the daily low.
Fundamental analysis: The lean hog futures market saw more technical selling today as the charts are firmly bearish. More solid losses in the cattle futures markets today also spilled over into selling pressure in hogs. The cash hog market continues to trend down, too. The latest CME lean hog index down 40 cents to $92.86. Wednesday’s projected CME index price is down another 21 cents at $92.65. The national direct five-day rolling average cash hog price quote for today is $92.36. The USDA’s noon pork report today showed cutout value was down $2.31 at $97.62, led by losses in picnics and bellies. Movement at midday was decent at 180.19 loads.
Technical analysis: October lean hog futures are still in a price downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $84.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $77.95. First resistance is seen at today’s high of $81.575 and then at $82.50. First support is seen at the August low of $79.675 and then at $77.95.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $2.65 to $210.95, near the daily low and hit an eight-month low. November feeder cattle lost $5.275 to $305.70, near the daily low and also hit an eight-month low.
Fundamental analysis: October live cattle and November feeder futures today saw follow-through selling pressure as the bullish traders continue to run for cover. The Trump administration’s latest push to lower beef prices via cheaper imports still has the cattle market bulls spooked. Lower cash cattle trading last week and early this week is also bearish for futures. Cattle futures are also under pressure as Monday marked the first day of the reopening of the southern border to feeder imports at the Douglas, Arizona port.
USDA at midday today reported very light cash cattle trading so far this week, at $218.00. The agency Monday said last week’s cash cattle trading activity averaged $225.01. The noon report today showed higher boxed beef prices, with Choice grade up $2.43 at $388.12 and Select grade up $5.46 at $370.48. Movement at midday was 59 loads. The Choice-Select spread is presently plus $17.64. In the southern Plains states, livestock heat stress continues week, making weight gains continuing to be a challenge.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $220.00. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at today’s high of $214.00 and then at $217.00. First support is seen at today’s low of $210.775 and then at $209.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $325.00. The next downside price objective for the bears is to close prices below solid technical support at $300.00. First resistance is seen at today’s high of $311.80 and then at$315.00. First support is seen at today’s low of $305.325 and then at $302.00.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.