Hogs
Price action: December lean hogs rose 57 1/2 cents to $82.35, nearer the daily low.
Fundamental analysis: The lean hog futures bulls have made a good recovery so far this week, after last week’s losses. Still, weakening cash hog market fundamentals are a concern for the hog market bulls. The discount December futures hold to the CME cash hog index is just under $8.00, suggesting futures traders expect more weakness in the cash hog market in the coming weeks.
The latest CME lean hog index is down 41 cents to $90.02 as of Nov. 8, the second straight daily decline. Wednesday’s projected price is down another 14 cents to $89.88. The national direct five-day rolling average cash hog price quote today is $84.01. The noon report today showed pork cutout value fell another $2.23 to $99.23, led by an $8.92 decline in bellies. Movement at midday was 196.68 loads.
Technical analysis: The lean hog futures bulls still have the firm overall near-term technical advantage. A three-month-old price uptrend is in place on the daily bar chart. However, this bull-market run is very mature and recent losses begin to suggest a market top may be in place. The next upside price objective for the hog bulls is to close December prices above solid chart resistance at the contract high of $85.075. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of $79.80. First resistance is seen at today’s high of $83.425 and then at $84.00. First support is seen at this week’s low of $80.875 and then at $79.80.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: You have 50% of fourth-quarter production hedged in December $84.00 put options at $2.075 and 50% of first-quarter production hedged in February $84.00 puts at $3.35.
Feed needs: You have all of fourth quarter and 25% of first quarter 2025 soymeal needs in the cash market. You should also have all corn-for-feed needs covered in the cash market through November.
Cattle
Price action: December live cattle futures rallied 70 cents to $184.40 and settled nearer session highs. January feeder futures settled $1.325 higher at $243.575, near session highs.
Fundamental analysis: Cattle futures saw modest corrective strength today as prices continue in an orderly downtrend on the daily bar chart. After last week’s drop in the cash cattle average, traders are anticipating sustained weakness into the December contract’s expiration, though do not yet expect large declines in the cash market. While the discount built in December futures show traders’ bearish bias, it also limits the downside in futures as traders don’t want to build too steep of discounts into the market as cattle prices have proven quite robust over the course. Dressed weights continue near record highs and that trend is likely to continue into the winter months, giving more beef per steer and helping packers and producers alike to get more bang for their buck. Given hefty packer purchases over the past few weeks, cash trade this week is likely to be limited as packers work to boost their margins once again. Choice cutout was up 61 cents at midsession to $308.82 and Select climbed 36 cents to $282.20. Both are still near recent lows but have bounced in the past couple of days.
Technical analysis: December live cattle futures saw corrective buying today, though bears still hold the near-term technical advantage. Initial resistance stands at $184.875, with backing from the 40-day moving average at $185.25. Bulls are ultimately seeking a close above last week’s high of $186.60. Support comes in at $184.20 then yesterday’s low of $182.80.
January feeder futures continue in a modest downtrend on the daily bar chart. Bulls are eyeing resistance at $244.00, which is backed by last week’s high at $245.55. Support comes in at $242.35, the 40-day moving average, then yesterday’s low of $239.90.
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 have all of fourth quarter and 25% of first quarter 2025 soymeal needs in the cash market. You should also have all corn-for-feed needs covered in the cash market through November.