Hogs
Price action: Long liquidation likely undercut hog futures Thursday, with the expiring February contract slipping 7.5 cents to $89.375. Most active April futures fell $1.225 to $93.10.
Fundamental analysis: The cash hog and wholesale pork market have continued their seasonal climb. The CME confirmed Monday’s quote for the hog index at $86.19, up 44 cents from last Friday. Tuesday’s preliminary figure will almost surely surge another 89 cents to $87.08, and the latest USDA data indicates Wednesday’s quote will likely jump another 98 cents to $88.06. Today’s February futures close suggests the surge in cash prices will slow significantly, since Friday’s index quote will be the final settlement for the contract. On the other hand, April futures imply the cash market will be another $4.00 high by mid-April.
Wholesale prices are also exhibiting impressive strength. Pork cutout had recently moved into the upper $90.00 range, with today’s midsession quote climbing another $2.04 to $100.67. That marks its first quote above $100.00 since November 12 last year. The latest rise was quite impressive since only picnics posted a loss, with hams leading the way higher. History suggests the seasonal advance could continue into late February, although the March through early-April period is much less reliable as to a specific seasonal pattern. We are sticking with ideas that the lateness of Easter this year (on April 20) will keep grocers pursuing pork, and especially hams, longer than normal this winter. Conversely, there are also significant questions about likely consumer and grocer demand for the various grilling cuts and bacon with Lent ending so late. Ultimately, recent seasonal and year-to-year reductions in hog slaughter suggest late-winter/spring hog supplies will prove surprisingly low, thereby offering strong underlying support for prices.
Technical analysis: Although today’s sizeable setback in April hog futures was rather surprising, bulls still own the short-term technical advantage. Bears did prove able to fill the chart gap created by Wednesday’s strong opening, but the bottom of that range at $93.025 remains initial support. Look for a zone of support down to the Nov. 27 high of $92.80, with additional support arriving at the contract’s 10- and 20-day moving averages near $91.38 and 90.30, respectively. Psychological support stands at $90.00. Today’s high marked initial resistance at $94.475, which is backed by yesterday’s high of $94.75, then by the psychological $95.00 level.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all soymeal needs covered in the cash market through March. You are hand-to-mouth on corn-for-feed needs.
Cattle
Price action: April live cattle rose 80 cents to $196.525 and near mid-range. March feeder cattle rose $3.00 to $267.975 and near the session high.
Fundamental analysis: The cattle futures markets saw some corrective buying and short covering from the speculators today, following recent price pressure. April live cattle futures steep’ discount to the cash cattle market also was supportive for cattle futures. Cash cattle trade so far this week sees the official USDA report showing light trading in the south at around again $203.00 Wednesday. Northern producers are likely watching late-week futures price action, looking to see what happens today and Friday. We wouldn’t be surprised to see packers try to trigger another futures drop tomorrow to persuade northern producers to lower asking prices.
The noon report today showed wholesale beef cutout values mixed, with Choice-grade down $1.12 to $318.14 and Select-grade up $1.02 to $310.16. Movement at midday was decent at 84 loads. The Choice-Select spread is presently $7.98. Retailer demand has been seasonally weaker, as seen by declining cutout value prices, and isn’t expected to improve much until late winter/early spring.
USDA this morning reported weekly U.S. beef export sales of 13,100 MT for 2025.
Technical analysis: Live and feeder cattle futures markets have suffered near-term chart damage recently to suggest market tops are in place. Prices are starting to trend down on the daily bar charts. The next upside price objective for the live cattle bulls is to close April futures above solid resistance at $200.00. The next downside technical objective for the bears is closing prices below solid technical support at $192.50. First resistance is seen at today’s high of $197.525 and then at this week’s high of $198.70. First support is seen at this week’s low of $194.95 and then at $194.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $275.00. The next downside price objective for the bears is to close prices below solid technical support at $260.00. First resistance is seen at this week’s high of $268.45 and then at $270.00. First support is seen at $266.00 and then $265.00.
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 should have all soymeal needs covered in the cash market through March. You are hand-to-mouth on corn-for-feed needs.