Hogs
Price action: Modest cash and wholesale strength seemed to undercut premiums in hog futures Thursday, with nearby February falling 82.5 cents to $82.30.
Fundamental analysis: The hog and pork complex is apparently continuing to strengthen seasonally, but the slow pace of gains undercut nearby futures Thursday. The CME officially stated Monday’s quote for the hog index at $80.99, up 23 points from last Friday. Tuesday’s unofficial quote rose 11 cents to $81.10 and Wednesday’s preliminary figures added another nine cents to reach $81.19. Meanwhile, pork cutout seems very stable around the $90.00 level. It ended Wednesday having gained 62 cents to $90.83 and inched up another three cents to $90.86 at midsession today. That result was very interesting since sizeable pork loin and butt gains more than offset big losses in hams and bellies. This seems to reflect underlying strength, since the former tend to be less variable than the latter. We continue expecting sustained seasonal strength over the next 4-6 weeks and will be particularly interested to see how this week’s slaughter measures up to the comparable year-ago figure. We see little reason to doubt the USDA was correct in projecting annually-reduced hog supplies through January (in the December Hogs & Pigs report) and are inclined to think the projected move back to an expansionary trend might not occur as quickly as implied.
Technical analysis: Although we believe bulls still own the overall technical advantage in February hog futures, it seems bears hold the edge from a short-term standpoint. Bulls again proved unable to challenge significant resistance at the Jan. 14 high of $83.875, much less the 40-day moving average at $84.11. Today’s high established initial resistance at $83.225. The daily low marked initial support at $82.025. That’s backed by the 10-day moving average near $81.56. A drop below that point would open the door to a retest of the psychological $80.00 level, then the Jan. 8 low of $78.45.
What to do: Get current with feed coverage.
Hedgers: You have 50% of first-quarter production hedged in February $84.00 puts at $3.35.
Feed needs: You should have all soymeal needs covered in the cash market through the end of February. You are hand-to-mouth on corn-for-feed needs.
Cattle
Price action: February live cattle fell $1.925 to $196.60 and nearer the session low. March feeder cattle lost $2.075 to $267.725, near mid-range.
Fundamental analysis: The cattle futures markets today saw profit-taking pressure from speculators following recent gains. Some corrective, consolidative price action is not surprising given the elevated price levels for the cattle futures markets. Cash market fundamentals remain overall positive and should limit the downside in futures markets.
Cash cattle trade this week has been mostly at steady prices, suggesting the eight-week string of cash cattle gains may be stalling. Cash cattle trade picked up in the south Thursday, with Texas-Oklahoma reporting 930 head sold at an average price of $201.00. Kansas sold 2,753 head at $200.98 and Iowa-southern Minnesota sold 519 head at $204.24. Feedlots are current on marketings and won’t likely be willing sellers at prices less than recent levels. Live cattle futures remain at hefty discounts to the cash market, also hinting feedlots may not be willing sellers on lower offers. The noon report today showed Choice grade boxed beef prices fell 95 cents to $333.19, while Select grade rose $1.05 to $319.09. Movement at midday was 58 loads. The Choice-Select spread is presently $14.10.
USDA this morning reported U.S. beef export sales totaled 9,700 MT for 2025, while exports totaled 14,000 MT.
World Weather Inc. today said a significant arctic air mass will impact the region with extreme cold Saturday into next Tuesday, which could cause livestock stress, especially if the animals are wet.
Technical analysis: Live and feeder cattle futures bulls still have the solid near-term technical advantage. Prices are in nine-week-old uptrends on the daily bar charts. The next upside price objective for the live cattle bulls is to close February futures above solid resistance at the contract high of $199.575. The next downside technical objective for the bears is closing prices below solid technical support at $193.00. First resistance is seen at $198.00 and then at last week’s high of $199.10. First support is seen at today’s low of $195.725 and then at $194.70. 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 $263.00. First resistance is seen at this week’s high of $270.175 and then at the contract high of $271.00. First support is seen at today’s low of $265.65 and then at $263.625.
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 the end of February. You are hand-to-mouth on corn-for-feed needs.