Hogs
Price action: August lean hog futures firmed 35 cents to $89.525, while deferred contracts posted losses.
Fundamental analysis: Lean hog futures traded with a varied tone today as the cash market is giving conflicting signals. The CME lean hog index is down a quarter to $89.20 today and the preliminary calculation puts the index down another 44 cents to $88.76 for tomorrow’s quote. Nearby July futures sank on the weak cash data but are still anticipating a modest rise into the contract’s expiration next Monday. The August contract continues to trade near par with the July contract, which implies uncertainty in the near term. While the CME lean hog index has seen relative weakness, wholesale pork prices have slowed their decline and bounced in the last week, most recently firming $1.30 to $96.21 this morning. Movement also remained relatively strong at 151.75 loads. Retail demand staying firm following the Fourth of July could be a sign that retailers will increase features of pork and drive consumer demand to pork rather than beef, which would likely stall the recent weakness seen in hog and pork prices.
Technical analysis: August lean hog futures continue to consolidate and have traded relatively sideways for the last couple of weeks. Bulls are seeking to overcome resistance at the 20-day moving average, currently at $90.30, which has capped gains the last three sessions. Strength above that mark eyes Friday’s high of $90.75 then $91.175. Selling pressure finds support at $89.35 with further selling finding support at $88.65, then $87.50.
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 corn-for-feed and soymeal needs covered in the cash market through July.
Cattle
Price action: August live cattle fell $2.075 to $184.35. August feeder cattle closed down $2.30 at $259.175. Both markets closed nearer their session lows.
Fundamental analysis: Heavy profit taking was featured in the cattle futures markets today after August live cattle prices Friday hit an 8.5-month high. A broad sell-off in much of the raw commodity futures sector today also limited buying interest in cattle futures. However, the cattle bulls are still confident amid strong cash fundamentals.
Last week’s average cash cattle trading price was $197.09, up $1.28 from the week-prior’s average and marked the fourth straight week of record-high average cash prices. We look for cash cattle trade this week to commence later again. The fact packers have bought a lot of cattle recently and have a decent supply moving forward suggests the cash market may be at or near a top.
Today’s noon report showed wholesale beef prices rose again, with Choice grade up $1.53 to $331.96, while Select grade rose $1.34 to $306.40. Movement was light at midday, at 27 loads. The Choice-Select spread is presently at $25.56. Beef packer margins are presently well in the black. Traders will likely focus on movement of wholesale beef as the summer doldrums typically cut beef demand post-Fourth of July.
The U.S. exported 258.9 million lbs. of beef in May, down 589,000 lbs. from April and 7.8 million lbs. less than last year, according to the U.S. Meat Export Federation. The value of U.S. beef exports totaled $902.4 million in May, the highest since June of 2023.
Technical analysis: The live cattle futures bulls still have the solid overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The next upside price objective for the bulls is to close August futures above solid resistance at the contract high of $192.45. The next downside technical objective for the bears is closing prices below solid technical support at $182.50. First resistance is seen at $186.00 and then at today’s high of $187.275. First support is seen at last week’s low of $183.625 and then at $182.00.
The feeder cattle futures bulls also have the overall near-term technical advantage. Prices are in a choppy, four-week-old uptrend on the daily bar chart. The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at the May high of $264.95. The next downside price objective for the bears is to close prices below solid technical support at the June low of $250.80. First resistance is seen at $263.00 and then at last week’s high of $263.90. First support is seen at $258.00 and then at last week’s low of $256.40.
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 corn-for-feed and soymeal needs covered in the cash market through July.