Price action: Lean hog futures closed 15 to 90 cents higher, which was a mid- to upper-range close in most contracts.
Fundamental analysis: After Monday's losses, traders covered some short positions in the hog market today. While traders anticipate a rise in cash hog bids as supplies further tighten into summer, the cash market was weaker today, and there was no strong fundamental backing for the price gains. Instead, they were mostly corrective in nature.
Uncertainty surrounding the porcine epidemic diarrhea virus (PEDV) situation is also causing traders to pause a little as they hope to get a better assessment of the impact on summer market hog numbers. But actual cuts to summer hog marketings won't likely be fully known until slaughter data hits.
Cash hog bids remained under pressure amid limited packer demand. Instead of actively competing for a tightening supply of market-ready hogs, many plants have mildly trimmed kill hours. More of that could be seen as supplies continue to tighten seasonally, which could limit the price advance in the cash hog market.
Technical analysis: June lean hog futures have staked out short-term boundaries from April 9 low of $115.92 1/2 to last Thursday's high of $125.50. The eventual breakout from this range will determine if hog futures make another push to the upside or are pointed toward another leg down on the correction from the contract high.
Hedgers: 50% of expected 2nd-qtr. hog marketings and 50% of expected 3rd-qtr. Hog marketing are covered in $126.00 June lean hog put options for $3.90.
Feed needs: Carry all corn-for-feed and meal risk in the cash market for now.
Price action: Live cattle futures closed 25 to 82 1/2 cents higher today. Prices swung over a wide range, moving to their highest level since April 11 but failed to hold the gains and closed low-range.
Fundamental analysis: Live cattle futures favored the plus side today mainly on short-covering following recent losses and attempts to narrow the spread between cash cattle prices and the June futures contract. Fund buying was active this morning as futures moved to their highs for the day.
Wholesale beef prices contributed to the gains as Choice boxed beef rose $2.26 this morning while Select gained $1.23. These increases followed a $2.71 surge in Choice boxed beef and a $2.84 jump in Select yesterday. However, movement slowed to 68 loads. The recent uptick in wholesale prices and downturn in cash cattle prices has significantly improved packer margins, but they continue to cut in the red.
Estimated federally inspected slaughter is pegged at 116,000 head today, which is down from last week's 118,000 head and 122,000 head a year ago.
Technical analysis: June live cattle futures closed higher today but failed in their attempt to penetrate resistance running from $135.20 to $136.35. June futures closed higher yesterday after probing and then bouncing off rising support at the November-December uptrend line. That line provides support at $134.20 on Wednesday.
Price action: Feeder cattle futures closed 25 to 55 cents higher but finished near their lows of the day after moving sharply higher.
Fundamental analysis: Feeder cattle futures moved higher this morning in conjunction with gains in live cattle futures. Deferred contracts posted new contract highs before trimming gains. The surge in corn futures near the end of trading along with weakening of gains in live cattle futures trimmed increases in feeder cattle futures.
Technical analysis: August feeder cattle futures rallied to a new contract high of $183.00 this morning, but was unable to find fresh buying above the old high. Monday's low at $180.95 is initial support. Strong support lies at the long-term uptrend, which intersects around $177.45 on Wednesday.
Hedgers: Fed cattle producers have 50% of 2nd-qtr. marketings hedged in April live cattle futures at $144.20. Stay in touch to exit or roll ahead of contract expiration on April 30.
Feed needs: Carry all corn-for-feed and meal risk in the cash market for now, but be prepared to extend coverage on a price break.