Hogs
Price action: April lean hogs rose 2 1/2 cents to $83.70, nearer the daily low and hit a five-month low early on.
Fundamental analysis: The lean hog futures market saw some tepid short covering from the recent strong selling pressure that has put the bulls on their heels. The big discount April lean hog futures hold to the cash index may limit the downside in futures this week. A risk-off trader mentality in the general marketplace and worries about new U.S. trade tariffs hurting U.S. pork exports also limited buying interest in hog futures today. President Trump is set to announce on Tuesday whether he will implement 25% tariffs on imports from Mexico and Canada and an additional 10% tariff increase on imports from China. Beijing is preparing countermeasures against new U.S. import tariffs, with U.S. agricultural exports in its sights, according to China’s state-backed Global Times.
The latest CME lean hog index is up 5 cents to $89.44 as of Feb. 27, though it has declined four of the last six days. However, Tuesday’s cash index is projected up 50 cents to $89.94. The national direct five-day rolling average cash hog price today is $90.23. The noon report today showed pork cutout value surged $7.06 to $105.48 amid a $31 gain in primal bellies. Belly prices have been volatile the past week and driving movement in cutout value. Midday movement was good at 148.63 loads.
Technical analysis: Lean hog futures bears have the overall near-term technical advantage amid the recent steep price downdraft. The next upside price objective for the hog bulls is to close April prices above solid chart resistance at $88.00. The next downside price objective for the bears is closing prices below solid technical support at $80.00. First resistance is seen at $85.00 and then at $86.00. First support is seen at today’s low of $82.725 and then at $82.00.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all corn-for-feed needs covered in the cash market through March. You have all soymeal needs covered in the cash market through April.
Cattle
Price action: April live cattle fell 40 cents to $192.25 and nearer the session high. May feeder cattle fell 92 1/2 cents to $270.20 and nearer the session high.
Fundamental analysis: The cattle futures markets today saw some selling pressure due a risk-off trading day in the general marketplace to start the trading week. Technical selling was also featured in the live cattle futures market as the near-term chart posture has turned firmly bearish.
Cash cattle and beef market fundamentals have also started to weaken a bit. Last week’s average cash cattle trading price was down $1.99 at $197.65. With it being early in the month, beef packers have ample supplies of contracted and formulated cattle on deck, which is likely to extend the recent weakening of cash cattle prices. We expect this week’s cash trade to come in steady to lower. The noon report today showed wholesale boxed beef cutout values mixed, with Choice grade up $1.30 to $313.13 and Choice grade slipping 24 cents to $301.81. Movement at midday was 51 loads. The Choice-Select cutout spread is presently $11.32.
World Weather Inc. today said a strong area of low pressure will impact the Plains later today into Tuesday. “The main concern with this is the intense to extreme winds that it will cause. Some wind gusts early Tuesday will be as high as 55 to 75 mph. In eastern Colorado, most of Nebraska, and parts of Kansas, these winds will combine with snow and create blizzard conditions that will cause notable livestock stress.”
Technical analysis: Live cattle futures bears have the overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above solid resistance at $197.00. The next downside technical objective for the bears is closing prices below solid technical support at $188.00. First resistance is seen at today’s high of $193.25 and then at $194.00. First support is seen at $191.pp and then at today’s low of $190.10.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at the contract high of $277.225. The next downside price objective for the bears is to close prices below solid technical support at the February low of $261.50. First resistance is seen at today’s high of $271.525 and then at $273.00. First support is seen at today’s low of $267.45 and then at $266.00.
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: You have all corn-for-feed needs covered in the cash market through March. You have all soymeal needs covered in the cash market through April.