Hogs
Price action: June lean hog futures closed $1.925 higher to $91.70, nearer session highs.
Fundamental analysis: June lean hogs saw corrective gains today after hitting a fresh eight month low. Reports that tariffs will be suspended on all countries but China, who will be tariffed at 125%, effectively immediately. Once that news hit the wire, lean hog futures surged near this week’s highs. Trade is likely to remain volatile as tariff headlines continue to drive trade. The escalating trade war with China is likely to weigh on trade in hog futures especially. The CME lean hog index is down 3 cents to $88.16 as of April 7. The preliminary calculation puts the index down another 16 cents to $88.00 tomorrow. Pork cutout prices are plunging, which is likely to weigh heavily on the index in the coming days. Cutout fell $2.17 to $91.28, which if sustained, will mark the lowest quote since mid-January. All losses except picnics posted losses this morning.
Technical analysis: June lean hog futures closed solidly higher after seeing modest corrective gains early in today’s session. Bears retain the technical advantage as prices are trending lower on the daily bar chart. Additional strength has bulls looking to overcome resistance at $92.00 before challenging the 10-day moving average at $93.25. Resurgent selling pressure has bears looking to topple support at $91.00 before challenging support at the April 8 for-the-move low close of $89.775.
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 April. You have all soymeal needs covered in the cash market through May.
Cattle
Price action: June live cattle surged $4.75 to $198.375, after scoring over a one-month low early on. Nearby April futures rose $3.70 to $202.80. May feeders surged $6.475 to $278.20.
Fundamental analysis: Cattle futures spent the morning struggling to score much momentum, though the Trump administration’s announcement of a 90-day pause on tariffs from non-retaliating countries spurred strong corrective gains. Recessionary fears receded across the broader marketplace, ultimately spurring risk-on sentiments and halting funds’ long liquidation efforts in both fats and feeders. Moreover, buying could continue to prove profound into the end of the week as traders look to narrow the futures’ discount to the cash market. However, cash trade has proven relatively light so far this week, which could indicate a noticeable drop in the cash market. The noon report showed Choice boxed beef reclaiming Tuesday’s losses by rising $1.56 to $339.66, while Select slid 72 cents to $321.34. Movement totaled 74 loads.
Technical analysis: April cattle futures rebounded solidly into the close, ending the session back above the 40-day moving average of $200.83. Initial resistance will now serve at $203.12, which is ultimately backed by the 10- and 20-day moving averages, which have converged around $205.72. Meanwhile, initial support will now lie at the 40-day moving average, with additional support serving at $197.98, and the 100-day moving average of $197.05.
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 April. You have all soymeal needs covered in the cash market through May.