Hogs
Price action: April lean hogs fell 47 1/2 cents to $87.60 and near mid-range.
Fundamental analysis: The lean hog futures market saw some mild technical selling pressure today after prices Monday challenged stiff overhead resistance but could not push above it today. Also weighing on futures prices today was news last week’s hog slaughter levels broke a string of year-to-year reductions that began in late January, as last week’s preliminary kill total was up about 2.4% from year-ago.
Limiting selling interest in futures today was news the National Pork Producers Council said all 300-plus U.S. pork harvesting and cold storage facilities have successfully renewed their registrations to export to China. This five-year renewal ensures continued market access to China for U.S. pork producers.
The latest CME lean hog index is down another 27 cents to $89.28 as of March 14. Monday’s official cash index is projected up 4 cents at $89.32 when it’s released Wednesday.
The national direct five-day rolling average cash hog price quote today is $90.34. The noon report today showed pork cutout value down 21 cents from Monday to $97.44, with losses in hams and bellies. Movement at midday was 133.98 loads.
Technical analysis: Lean hog futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. The next upside price objective for the hog bulls is to close April prices above solid chart resistance at $90.00. The next downside price objective for the bears is closing prices below solid technical support at the March low of $80.725. First resistance is seen at this week’s high of $88.60 and then at $90.00. First support is seen at today’s low of $86.325 and then at $85.00.
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 March. You have all soymeal needs covered in the cash market through April.
Cattle
Price action: Tariff concerns seemed to undercut cattle markets Tuesday, but bulls powered the nearby contracts higher at the close. April live cattle edged up 35 cents to $205.375, while most-active April feeders gained 35 cents to $284.55. Expiring March feeder futures also rose 35 cents to $284.975.
Fundamental analysis: Underlying fundamentals remain quite supportive of the cattle and feeder markets. As noted Monday, last week’s cash average for fed cattle leapt to $205.30, with the flood of cash trading on Friday more than offsetting early-week trade steady with week-prior levels. Given Friday’s scheduled release of the monthly USDA Cattle on Feed report, we expect limited cash trading before its release this week as well. Indeed, there was apparently no slaughter cattle trade Monday. Meanwhile, after soaring in Monday morning action, wholesale beef prices ended the day moderately higher. Choice beef rose again this morning, adding $1.82 to $322.98, while select cutout gained $1.43 to $309.33. The market may again set back from midsession levels this afternoon, but the short-term uptrend seems likely to continue as grocers continue gearing up for grilling season.
February 2024 had one less workday (19) than did its 2024 counterpart due to leap day. That partially explains the likely year-to-year drop in feedlot marketings at 91.8% of last year, as indicated by industry surveys coming out at midweek. Conversely, the sustained drop in fed cattle prices last month, as well as persistently elevated costs for replacement yearlings, has analysts expecting Feb. feedlot placements at just 85.6% of year-ago. The combination of those results would put the March 1, Cattle on Feed population at 98.2% of last year. This suggests a bullish result for Friday’s USDA report, but the extremely low survey figure for Feb. placements also give considerable room for a surprisingly large result and a potentially bearish futures reaction.
The feeder index quote published Monday afternoon rose another 55 cents to a fresh all-time high at $283.27. Thus, modest premiums built into the spring feeder contracts seem well justified. Traders remain bullish about the summer-fall outlook as well, as indicated by August feeders seeming set to challenge the $290.00 level.
Technical analysis: Bulls still hold the short-term technical advantage in April live cattle futures, with the higher close in the wake of sizeable early losses emphasizing that view. Expect initial support at the psychological $205.00 level, with backing from the daily low at $204.225. The chart suggests another layer of support around $202.00, then at the hugely important psychological level of $200.00. Today’s high marked tentative initial resistance at $205.525, which essentially matched the Jan. 27 high of $205.55. Next resistance is at the Jan. 28 high of $207.725, with stiff backing at the February contract’s all-time high at $209.35.
With April feeder futures advancing to a fresh contract high at $285.30, bulls clearly own the short-term technical advantage in that market as well. On the other hand, the setback below the psychological $285.00 level marks that point as initial resistance. The contract high represents added resistance. A breakout above that level would have bulls targeting $290.00. Initial support at yesterday’s high of $284.35 is reinforced by today’s low of $283.25. Look for added support at the psychological $280.00 level, then at the 10-day moving average near $279.51.
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 March. You have all soymeal needs covered in the cash market through April.