Livestock Analysis | Cattle futures carve fresh near-term lows
Hogs
Price action: October lean hog futures rose $0.45 to $80.90, nearer the daily high.
Fundamental analysis: The lean hog futures market paused today as bulls work to stop the bleeding. Technical charts are firmly bearish, which keeps the chart-based specs confident to continue to play the short side. More losses in the live cattle futures market today limited buying interest in hog futures. The cash hog market continues to trend down. The latest CME lean hog index down 21 cents to $92.65. Thursday’s projected CME index price is down another 23 cents at $91.64. The national direct five-day rolling average cash hog price quote for today is $91.64. The USDA’s noon pork report today showed cutout value was down $0.75 at $96.92, led by losses in picnics and bellies. Movement at midday was 157.90 loads.
Technical analysis: October lean hog futures are in a price downtrend on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $84.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $77.95. First resistance is seen at this week’s high of $81.575 and then at $82.50. First support is seen at the August low of $79.675 and then at $77.95.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.
Cattle
Price action: October live cattle fell $0.175 to $210.775, near mid-range and hit another eight-month low. November feeder cattle rose $1.80 to $307.50, nearer the daily high and also hit another eight-month low early on.
Fundamental analysis: October live cattle saw mild technical pressure and weak long liquidation as the cattle bulls continue to suffer from the Trump administration’s moves to lower beef prices via cheaper imports as well as the reopening of the southern border to feeder cattle imports at the Douglas, Arizona port. Cash cattle trading is also taking place this week at significantly lower money than last week. However, both futures markets rallied off their daily lows as the session progressed, with short covering featured.
USDA at midday today reported more active cash cattle trading so far this week, with steers averaging $218.12 and heifers $218.31. The agency Monday said last week’s cash cattle trading activity averaged $225.01. The noon report today showed weaker boxed beef prices, with Choice grade down $1.05 at $387.48 and Select grade down $2.69 at $366.29. Movement at midday was 63 loads. The Choice-Select spread is presently plus $21.19. In the southern Plains states, livestock heat stress continues this week, making weight gains continuing to be a challenge for producers.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $220.00. The next downside technical objective for the bears is closing prices below solid technical support at $200.00. First resistance is seen at Tuesday’s high of $214.00 and then at $217.00. First support is seen at today’s low of $209.525 and then at $208.00.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $325.00. The next downside price objective for the bears is to close prices below solid technical support at $300.00. First resistance is seen at today’s high of $309.00 and then at $311.80. First support is seen at today’s low of $304.15 and then at $302.50.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market.Be prepared to make purchases if value prices continue.
