Hogs
Price action: December lean hog futures rose $0.425 to $58.60, nearer the daily high and hit another contract low early on.
Fundamental analysis: The lean hog futures market saw mild short covering and perceived bargain hunting today. Still, the near-term technical posture is firmly bearish. Cash hog prices and the CME cash index continue to trend lower.
The latest CME lean hog index is down $0.82 to $65.75. Wednesday’s projected CME index price is down $0.76 at $64.99. The national direct five-day rolling average cash hog price quote for today is $53.00. The USDA noon pork report today showed cutout value was up $2.24 at $74.52, led by gains in Butts, hams and picnics. Movement at midday was 162.43 loads.
Technical analysis: December lean hog futures see the technical posture as firmly bearish amid a price downtrend in place on the daily chart. However, the market is still short-term oversold, basis the Relative Strength Index. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $65.00. The next downside price objective for the bears is closing prices below solid technical support at $55.00. First resistance is seen at this week’s high of $60.475 and then at $62.275. First support is seen at today’s low of $57.425 and then at $56.00.
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 needs covered through the end of December and through the end of November for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle fell $1.55 to $218.15, near the daily low and hit a six-week low. January feeder cattle fell $4.30 to $328.375, near the daily low and hit a four-week low.
Fundamental analysis: The cattle futures markets saw more technical selling pressure today. The near-term technical postures of both markets have deteriorated significantly in the past several sessions. Price uptrends on the daily charts for both markets have been soundly negated.
Solidly lower cash cattle trading last week has also limited buying interest in futures. USDA at midday Monday reported cash cattle trading last week averaged $223.65, which is down $3.41 from the week prior average of $227.06. USDA today reported no cash cattle trading activity so far this week. The noon report today showed higher boxed beef prices, with Choice grade up $1.24 at $366.28 and Select grade up $3.83 at $358.77. Movement at midday was 65 loads. The Choice-Select spread is presently plus $7.51.
Technical analysis: December live cattle and November feeder bulls have faded recently as price uptrends on the daily charts have been soundly negated. The next upside price objective for the live cattle bulls is to close December futures above resistance at $226.00. The next downside technical objective for the bears is closing prices below solid technical support at $215.00. First resistance is seen at this week’s high of $221.775 and then at $224.00. First support is seen at today’s low of $218.10 and then at $217.00.
The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at the October high of $348.775. The next downside price objective for the bears is to close prices below solid technical support at $320.00. First resistance is seen at this week’s high of $334.675 and then at $337.50. First support is seen at $327.00 and then at $325.00.
What to do: You are covered through the end of December for corn-for-feed and are hand to mouth for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed needs covered through the end of December and through the end of November for soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
