Hogs
Price action: August lean hog futures rose $0.35 to $98.45, near mid-range.
Fundamental analysis: The lean hog futures market paused today but the bulls are keeping alive a price uptrend on the daily bar chart and are keeping their near-term chart advantage. BLT season is right around the corner, and that will limit selling interest in futures and support wholesale pork prices in the near term.
The USDA noon pork report today showed cutout value was down $0.10 at $101.45, led by declines in bellies. Movement at midday was 160.33 loads. The latest CME lean hog index is up 42 cents to $93.11. Wednesday’s projected CME index price is up 76 cents at $93.87. The national direct five-day rolling average cash hog price quote for today is $96.91.
Technical analysis: August lean hog futures see a price uptrend still in place on the daily bar chart. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $102.00. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $96.325. First resistance is seen at $100.00 and then at $101.00. First support is seen at $97.00 and then at $96.00.
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 have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle fell $3.30 to $231.425, near the daily low and hit a 3.5-month low. August feeder cattle lost $5.55 to $348.80, nearer the daily low and hit a five-week low.
Fundamental analysis: The live and feeder cattle futures markets today saw a resumption of chart-based selling pressure amid price downtrends firmly in place on the daily bar charts. Lower cash cattle price being fetched in very light trading early this week is also negative for futures.
In the Northern Plains, excessive heat has been severely stressing livestock, said World Weather Inc. The heat in the Plains is expected to persist into later this week.
USDA at midday today reported very light cash cattle trading taking place at $244.49. The agency on Monday reported last week’s cash cattle trading averaged $248.01, down $7.11. from the week prior’s average $255.12. The noon report today showed mixed boxed beef prices, with Choice grade down $0.01 at $375.60 and Select grade up $0.70 at $366.87. Movement at midday was 51 loads. The Choice-Select spread is presently plus $9.73.
Technical analysis: Live and feeder cattle futures markets see firm price downtrends in place on their daily bar charts, which suggests still more downside price pressure in the near term. The next upside price objective for the live cattle bulls is to close August futures above resistance at $240.00. The next downside technical objective for the bears is closing prices below solid technical support at $227.50. First resistance is seen at today’s high of $234.225 and then at this week’s high of $236.50. First support is seen at $231.00 and then at $230.00.
The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $360.00. The next downside price objective for the bears is to close prices below solid technical support at the June low of $335.95. First resistance is seen at today’s high of $353.475 and then at $355.00. First support is seen at $348.00 and then at $345.00.
What to do: You have corn-for-feed and soymeal needs covered through July 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 July in the cash market. Be prepared to make purchases if value prices continue.