Hogs
Price action: December lean hog futures climbed 52.5 cents to $80.025, though closed mid-range.
Fundamental analysis: Lean hog futures opened higher but struggled to maintain gains as the session went on. Gains this morning can be chalked up to corrective, consolidative gains. The return of seasonal weakness in the CME lean hog index has weighed heavily on futures, but traders are likely to be hesitant to build steep discounts in the cash index as demand for pork remains quite strong. The index is down 51 cents to $89.27 as of Nov. 14, the fifth decline in the last six days. While cutout has pulled back sharply from recent highs, prices have stabilized near $97.00. Volatility in primal bellies has led to swings in cutout, but short belly stocks are likely to keep prices from falling too far and seasonal ham purchases ahead of Thanksgiving are likely to help prop up cutout as well. Cutout fell 8 cents to $97.03 at midsession, led by weakness in ribs and bellies.
Technical analysis: December lean hog futures traded higher today though closed well off session highs as bears continue to maintain the near-term technical advantage. Bulls are seeking to close prices above resistance at the 20-day moving average at $80.55, which capped gains today. Strength above that mark finds resistance at last week’s high of $83.425, with additional resistance at $82.35 on the way. Support lies at today’s intraday low of $79.60, which is reinforced by the 40-day moving average at $78.80.
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 rose $1.15 to $184.10, near the daily high. January feeder cattle rose $2.275 to $249.50, near the session high and hit a 3.5-month high.
Fundamental analysis: Short covering was seen in December live cattle futures after prices Friday hit a seven-week low. Technical buying was featured in feeder cattle futures as the near-term chart posture for January futures has markedly improved the past two sessions. However, cash cattle and beef market fundamentals have deteriorated lately. Cash cattle trade averaged $184.79 last week, down $1.74 from the previous week and the third straight down-week for the average cash price. With beef packer margins deep in the red, lower cash cattle prices are expected again this week.
The noon report today showed wholesale boxed beef values mixed, with Choice grade gaining $4.48 to $307.82, while Select grade fell $1.09 to $275.05. The Choice-Select spread widened out to $32.77, suggesting still-tight supplies of market-ready animals in feedlots. Movement at midday was decent at 65 loads.
Technical analysis: The live cattle futures bulls and bears are on a level overall near-term technical playing field. Prices are in a three-week-old downtrend on the daily bar chart. The next upside price objective for the live cattle bulls is to close December futures above solid resistance at $186.00. The next downside technical objective for the bears is closing prices below solid technical support at $180.00. First resistance is seen at today’s high of $184.30 and then at $185.275. First support is seen at last week’s low of $182.60 and then at $182.00.
The feeder cattle futures bulls have gained the overall near-term technical advantage. The next upside price objective for the feeder bulls is to close January futures prices above technical resistance at $252.50. The next downside price objective for the bears is to close prices below solid technical support at the October low of $239.50. First resistance is seen at $250.00 and then at $251.00. First support is seen at today’s low of $246.65 and then at $245.00.
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 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.