Hogs
Price action: June lean hog futures closed $1.50 lower to $90.05 and near mid-range. Nearby April futures climbed 42.5 cents to $87.80.
Fundamental analysis: June lean hog futures forged a fresh for-the-move low as risk-off trading continues to drive the market. A lot of the recent selling can be attributed to volatility in outside markets as traders are looking to reduce risk as much as they can. The CME lean hog index is down another 36 cents to $88.36 as of April 3. The preliminary calculation puts the index down another 17 cents to $88.19, a fresh for-the-move low. That likely reflects weakness seen in pork cutout late last week. Cutout has since had an impressive recovery, surging $3.57 to $99.34 at midsession today. All cuts except bellies posted gains this morning, though hams led the way higher, rising $9.78. The direct market continues to trade below the negotiated market which indicates the cash hog market is likely to continue to work lower.
Technical analysis: June lean hog futures saw followthrough selling today and ended mid-range as bears retain the technical advantage. Bulls managed to close prices back above the psychological $90.00 mark which will remain support tomorrow. Additional selling would find support at today’s low of $88.70 then $87.50. Bulls are looking to tackle resistance at $91.55 with additional strength looking to tackle the $93.15 mark. Persistent strength looks to overcome 10-day moving average resistance at $94.45.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all corn-for-feed needs covered in the cash market through April. You have all soymeal needs covered in the cash market through May.
Cattle
Price action: June live cattle fell $4.025 to $194.175, nearer the session low and hit a four-week low. May feeder cattle lost $3.60 to $271.275, near mid-range and hit a four-week low.
Fundamental analysis: The cattle futures markets were hit hard again today by risk-off trading attitudes as the major U.S. stock indexes flirt with bear-market territory, which is down 20% from their 52-week highs. That’s sapping consumer confidence and likely doing the same for demand at the meat counter. Bulls are hoping live and feeder cattle futures that are now trading at steep discounts to their respective cash markets will limit further downside price pressure.
Cash cattle market fundamentals remain firm, overall, but have weakened a bit. Cash cattle trading last week averaged $211.14, down $1.00 from the week prior. We look for weaker cash cattle trading action when it commences this week. The noon report today showed wholesale boxed beef values rose, with Choice-grade up $2.21 at $340.66, while Select gained $1.97 to $319.15. Movement at midday was light at 37 loads. The Choice-Select spread is presently $21.51.
Technical analysis: Live and feeder cattle futures bulls have lost their overall near-term technical advantage. Price uptrends on the daily bar charts have been soundly negated. The next upside price objective for the live cattle bulls is to close June futures above resistance at $203.70, which is the top of a downside price gap on the daily bar chart. The next downside technical objective for the bears is closing prices below solid technical support at the March low of $185.00. First resistance is seen at $197.00 and then at today’s high of $199.40. First support is seen at today’s low of $194.275 and then at $193.00.
The next upside price objective for the feeder bulls is to close May futures prices above technical resistance at $282.275, which is the top of a downside price gap formed on the daily chart. The next downside price objective for the bears is to close prices below solid technical support at the February low of $261.50. First resistance is seen at today’s high of $277.20 and then at $280.00. First support is seen at $270.00 and then at today’s low of $267.20.
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 corn-for-feed needs covered in the cash market through April. You have all soymeal needs covered in the cash market through May.