Hogs
Price action: December lean hogs rose 10 cents to $74.975 though settled nearer the session low. Prices hit a 3.5-month high early on today.
Fundamental analysis: Some more technically based buying from the speculators was featured earlier this morning in the lean hog futures market. However, prices backed off the daily highs on some mild profit-taking pressure from recent good gains. Recent solid gains in the cattle futures markets have also supported spillover buying interest in the lean hog futures.
The latest CME lean hog index is down 7 cents to $84.29 as of Sept. 20--the second straight daily decline after a brief uptick late last week. Wednesday’s projected CME cash index price is down another 8 cents at $84.21. The five-day national direct rolling average cash hog price quote today is $76.15. The noon report today showed pork cutout value rose 47 cents to $94.61, with hams leading gainers. Movement at midday was good at 176.87 loads.
Hog traders are awaiting Thursday afternoon’s quarterly USDA hogs and pigs report, which is expected to show the U.S. hog population on Sept. 1 at nearly the same size as one year ago at the same time, according to a Reuters survey of analysts. Hogs kept for breeding number is expected down slightly from last September and the kept-for-marketing figure is expected to be virtually unchanged from last year.
Technical analysis: The lean hog futures bulls have the overall near-term technical advantage. A six-week-old price uptrend is in place on the daily bar chart. The next upside price objective for the hog bulls is to close December prices above solid chart resistance at the May high of $77.725. The next downside price objective for the bears is closing prices below solid technical support at the September low of $70.55. First resistance is seen at today’s high of $75.80 and then at $77.00. First support is seen at this week’s low of $74.125 and then at $73.00.
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 August.
Cattle
Price action: December live cattle futures climbed 57.5 cents to $184.40, though nearby October futures sunk a nickel to $183.20. October feeder cattle futures climbed $1.325 to $245.80 and closed near session highs.
Fundamental analysis: Live cattle futures continue to trend higher as the December contract closed higher for the sixth consecutive session. Some profit-taking is possible in the near future as prices are quickly nearing overbought on the daily bar chart. Deferred futures are now trading at a premium to the cash market for the first time in several months, with December futures settling 39 cents above last week’s cash average. Traders anticipate cash market strength through early next year but are conservative in pricing in sustained strength. While futures maintain carry through the April 2025 contract, the April future settled just $2.60 above the October contract. While traders are becoming more bullish, they are still being fairly conservative.
A lot of the same can be said for feeder futures. Traders are optimistic through the fall but anticipate weakness in the cash market early next year. The feeder cattle index continues to edge largely sideways, but traders anticipate some strength in the coming weeks. The index was most recently quoted 24 cents higher to $243.50.
Wholesale beef prices were higher this morning, with Choice cutout climbing 98 cents to $302.79 and Select firming 77 cents to $288.56. Cutting margins have slipped back into the red, with Hedgersedge now estimating cattle margins at -$23.50/head.
Technical analysis: December live cattle futures continue to trend higher as bulls maintain the technical advantage. Prices are now above all the moving averages as bulls continue to establish stronger and stronger momentum. Resistance stands at the psychological $185.00 mark, which capped gains today. Little resistance stands above that mark until $187.25. Support comes in at $183.60 then $183.00, with firm backing from the 10-day moving average at $181.10.
October feeder cattle futures continue to grind higher on the daily bar chart as bulls retain the technical advantage. Resistance steams from $246.575 then the 100-day moving average at $248.10. Bulls are seeking to hold support at $243.00 the n$241.80, the 10-day moving average, on an increase in selling pressure.
What to do: Get current with feed advice. Carry all production risk in the cash market for now.
Hedgers: 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 August.