Hogs
Price action: Hog futures remained strong Thursday, with the nearby February contract rising 47.5 cents to $84.375 and most-active April climbing 60 cents to $91.925.
Fundamental analysis: The recent rally in cash hog prices, as represented by the CME Lean Hog Index, has accelerated this week. Recent gains in the CME lean hog index have increased in size. The latest official quote (for Tuesday) rose 48 cents to $82.59. The preliminary calculation adds another 47 cents to $83.06 for Wednesday’s figure. We still suspect a modest annual reduction in hog numbers is somewhat exaggerating the usual early-year decline in hog supplies. We expect more of the same in the latter regard, and will find out more on the former point when the USDA publishes this week’s preliminary slaughter total tomorrow afternoon.
The market is also being helped by sustained wholesale strength. Pork cutout rose to $93.31 Wednesday, but slipped 12 cents to $93.19 at midsession today. Gains in loins, butts and picnics mostly offset slippage in ribs and hams, along with a $3.00-plus drop in primal pork belly values. We still think seasonally improving demand for hams from grocers and processors will continue supporting the complex in the coming weeks. Expiring February futures imply a cash rise of about $1.50 over the next two weeks (when the contract goes off the board on Feb. 14).
Technical analysis: Bulls own the short-term technical advantage in April hogs in the wake of recent gains, with today’s high placing initial resistance at $92.75. That’s backed by the Dec. 3 high of $93.60, then by the psychological $95.00 level. A breakout above the latter point would open the door to a run at the $100.00 level. Today’s low marked initial support at $90.90, which is backed by psychological support at $90.00, then by the confluence of the contract’s 10-, 20-, and 40-day moving averages in the $89.22 to $89.41 area.
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 the end of February. You are hand-to-mouth on corn-for-feed needs.
Cattle
Price action: April live cattle fell $3.45 to $201.50, nearer the session low. March feeder cattle fell $2.075 to $273.20, nearer the session low.
Fundamental analysis: More profit-taking pressure was featured in the live and feeder cattle futures markets after they hit record highs earlier this week. The near-term technical postures for both cattle futures markets are now deteriorating a bit, to begin to suggest bulls are finally exhausted and that near-term market tops may be in place. However, futures’ discounts to the cash cattle market could limit further losses.
Cash cattle and beef market fundamentals have also started to weaken a bit. Pro Farmer cash sources today said $208.00 cash cattle trading occurred in Kansas this morning. That’s near the top of last week’s trading range but up from the state’s average last week. Packers have been slow to establish cash cattle bids this week. After surging $24.40 during a 10-week span of price gains, cash cattle prices may have a hard time posting additional advances, but, it’s unlikely they will fall much if at all, because feedlots are very current and about 300 head of Iowa-southern Minnesota cattle traded at $211.79 Wednesday.
The noon report today showed wholesale boxed beef values lower, with Choice grade down $1.68 to $328.86, while Select cutout fell $4.23 to $316.44. That put the Choice-Select spread at $12.42. Movement at midday was 73 loads.
USDA this morning reported U.S. beef export sales of 20,200 MT for the 2025 marketing year. January feeder futures expired at $281.90 at noon, while the latest quote for the feeder index rose 39 cents to $279.45.
Technical analysis: While live and feeder cattle futures bulls still have the overall near-term technical advantage as prices are still in 2.5-month-old uptrends on the daily bar charts, two sessions in a row of solidly lower prices and low-range closes suggest the bulls are exhausted and market tops may be in place. The next upside price objective for the live cattle bulls is to close April futures above solid resistance at this week’s contract high of $207.725. The next downside technical objective for the bears is closing prices below solid technical support at $195.00. First resistance is seen at $203.00 and then at $204.00. First support is seen at today’s low of $200.825 and then at $200.00.
The next upside price objective for the feeder bulls is to close March futures prices above technical resistance at $285.00. The next downside price objective for the bears is to close prices below solid technical support at $266.00. First resistance is seen at $275.00 and then at today’s high of $276.75. First support is seen at today’s low of $272.00 and then at $270.00.
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 the end of February. You are hand-to-mouth on corn-for-feed needs.