Hogs
Price action: Hog futures traded mixed Thursday, with nearby August dipping 27.5 cents to $91.375. October futures posted modest gains.
Fundamental analysis: After having surged from last week’s lows, hog futures traded around unchanged today. One has to suspect the rally put the nearby August contract back into the range they’re expecting the cash market to reach in the near term. The cash and wholesale markets are apparently moving in that direction. For example, the hog index for Tuesday officially rose 18 cents to $88.80. But the more interesting fact is that today’s preliminary quote for Wednesday climbed 47 cents to $89.27, which is the first time in over a week for it to top the $89.00 level. That strength was reinforced by this morning’s pork cutout quote; that rose 90 cents to $100.22.
Again, given the premium now built into the August future, as well as the sizeable gains posted by the October and December contracts, traders are probably less willing to push the market even higher. This suggests futures may trade sideways in the days ahead. We tend to think the industry is anticipating improved pork demand from consumers, since expectations for a seasonal and cyclical increase in hog slaughter and pork production are already built into the market.
Technical analysis: One can argue that bulls now have a tentative short-term technical advantage in August hog futures, especially after bears proved unable to sustain the early drop below the contract’s 40-day moving average. That marks initial support near $91.17, with added support emerging at today’s low of $90.65. Expect added psychological support around $90.00, then at the June 27 low of $87.60. Today’s high placed initial resistance at $91.92, with strong backing from the June 6 high of $92.45. A breakout above that point would have bulls targeting $95.00.
What to do: Get current with feed advice. Carry all production risk in the cash market for now.
Hedgers: Carry all risk in the cash market for now.
Feed needs: You should have all soymeal needs covered in the cash market through mid-August. You should have all corn-for-feed needs covered in the cash market through July.
Cattle
Price action: August live cattle fell $2.025 to $182.25. August feeder cattle closed down $2.325 at $256.225. Both markets closed nearer their session lows.
Fundamental analysis: Trading in live and feeder cattle futures has turned choppier recently despite still-friendly cash market fundamentals. Light cash cattle trade started Wednesday at $188.00 in the Southern Plains, which is steady from last week but better than many traders had expected. There has been no trade in Nebraska so far this week. Iowa has seen 240 head trade at $195.00, which is down from last week’s average of $196.83. Texas-Oklahoma saw 3,213 head traded at $188.27, up from last week’s average of $187.99. Kansas has seen 1,421 head trade at $187.48, down from last week’s average at $188.56.
Today’s noon report showed wholesale boxed beef cutout values mixed, with Choice falling $1.20 to $316.96, while Select rose 52 cents to $298.96, taking the Choice/Select spread to $18.00. Movement at midday was strong at 116 loads for the day. Retailers have been actively featuring beef in the meat case, due in part to wholesale prices remaining below year-ago.
USDA this morning reported net U.S. beef sales of 15,400 MT for 2024, up 85% from the previous week and 11% from the four-week average. Exports totaled 15,600 MT.
Cattle traders are awaiting Friday afternoon’s monthly USDA cattle-on-feed report, which is expected to show a slight rise in on-feed numbers, according to a Reuters survey of analysts. The survey showed no clear consensus on placements. A big dip in marketings from last year is expected in Friday afternoon’s report since June 2024 had two less workdays than did June 2023.
Technical analysis: The live cattle futures bulls still have the overall near-term technical advantage. A three-month-old uptrend on the daily bar chart is still in place, but the bulls need to show fresh power soon to keep it alive. The next upside price objective for the bulls is to close August futures above solid resistance at the July high of $188.25. The next downside technical objective for the bears is closing prices below solid technical support at $178.00. First resistance is seen at this week’s high of $184.575 and then at $186.00. First support is seen at today’s low of $181.875 and then at July low of $180.825.
August feeder cattle futures scored a bearish “outside day” down on the daily bar chart today. The bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at this week’s high of $260.25. The next downside price objective for the bears is to close prices below solid technical support at the July low of $253.45. First resistance is seen at $258.00 and then at today’s high of $259.65. First support is seen at today’s low of $255.575 and then at $254.00. Having the feeder index (which futures cash-settle against) now quoted at $261.32 seemingly favors bulls.
What to do: Get current with feed advice. Carry all production risk in the cash market for now.
Hedgers: Get current with feed advice. Carry all production risk in the cash market for now.
Feed needs: You should have all soymeal needs covered in the cash market through mid-August. You should have all corn-for-feed needs covered in the cash market through July.