Hogs
Price action: December lean hogs fell $2.10 to $81.125, near the daily low.
Fundamental analysis: The lean hog futures market today saw more heavy profit-taking pressure from the speculators after prices last Friday hit a contract high. Hog futures traders are expecting an end soon to the recent counter-seasonal strength in the cash market. December lean hog futures finished today at a more-than-$8.00 discount to the latest CME cash index, also suggesting traders don’t expect the cash hog strength to continue. The latest CME lean hog index is up another 82 cents to $89.38 as of Nov. 1. The index on Wednesday is projected up another 41 cents at $89.79—which would be the 13th daily gain in a row. The national direct five-day rolling average cash hog price quote today is $84.51. The noon report today showed pork cutout value fell $1.95 to $102.06, led by losses in loins, butts and bellies. Movement at midday was decent at 176.12 loads.
Technical analysis: The lean hog futures bulls still have the overall near-term technical advantage. A 2.5-month-old price uptrend is in place on the daily bar chart. However, this bull-market run is very mature and this week’s losses begin to suggest a market top is 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 $78.00. First resistance is seen at today’s high of $82.975 and then at $84.00. First support is seen at today’s low of $81.075 and then at $80.00.
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 fell 30 cents to $184.775, though deferred contracts posted modest gains. November feeder cattle futures dropped 20 cents to $246.15.
Fundamental analysis: Cattle futures traded on either side of unchanged before closing modestly lower on the day. Prices continue to consolidate near recent lows as traders are anticipating a downturn in the cash market but are hesitant to build in too steep of discounts. Still, the technical posture of December live cattle futures has eroded, negating the recent uptrend. Cash cattle trade started early this week in the Plains, with trade in Kansas averaging $187.71, down sharply from last week’s average of $190.00 for the area, though a significant portion of this week’s trade was lower grade steers, hurting the average. That sets the precedence for lower cash cattle trade this week and with packer margins trimming to single digits in the black, they are unlikely to actively bid for higher cattle prices this week barring a significant shift in the marketplace. Wholesale beef prices were mixed this morning, with Choice cutout firming $1.77 to $318.68 and Select sinking 44 cents to $286.72. Firming Choice cutout is likely to lift packer margins, but with cutout trending lower, they are unlikely to be quick to raise bids.
Feeder cattle futures continue to trend lower despite the feeder cattle index, most recently up two cents to $251.00, showing relative strength. Gains seen in the corn market have likely weighed on feeder cattle futures, with rising concerns over waning beef demand in the fourth quarter where hams and turkeys typically draw from beef consumption.
Technical analysis: December live cattle futures closed modestly lower today and at the lowest close in six weeks. Price uptrends have rolled over on the daily bar chart. Bulls are looking to retake resistance at the 40-day moving average at $185.40, which capped most of the upside today. Additional resistance stands at the Oct. 17 close of $186.175. Meanwhile, support stems from last week’s low of $184.45, which is reinforced by $184.00, then $183.325.
November feeder cattle futures continue to trade in a modest downtrend from the early October highs. Prices are pinned between 40-day moving average support at $245.60 and 100-day moving average resistance at $247.00, settling between those marks for five consecutive sessions. Additional resistance lies at $249.00, while stiff support stems from $243.65.
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.