** AgResource Daily Cattle Analysis: Cattle and feeder cattle futures closed up on Tuesday following an inside day of trading, and a firm outlook is offered for early trade this morning. After a steady start to the morning June cattle traded down through the first half of the day before finding support just above Monday’s lows that carried the market higher into the close.
Feeders traded inside as well and reluctantly followed the fat market higher. The cash index went the other direction and was $1.36 lower at $138.05 or just below April, ahead of Thursday’s expiration.
Cash cattle markets went untraded through Tuesday. The Fed Cattle Exchange auction will get underway later this morning, with 5,448 head consigned to this week’s sale. The last several sales have been unsuccessful, and negotiated markets outside of the Exchange have traded higher. No bids or offers were quoted through Tuesday, but the trade seems to be leaning towards steady/higher business this week.
Beef cutout values were mixed Tuesday morning and higher in the afternoon. The choice cutout value gained $.34 to $219.01 and the select value gained $1.98 to $206.27, with the USDA noting moderate to fairly good demand and moderate to heavy offerings.
Liquidation from the On Feed report reaction looks to have largely been played out through Monday’s trade, and the market is back to focusing on historically strong basis and valuing cattle for the summer. April goes off the board at the end of the week, and June looks to take over at a record low difference. Longer term, the 4th quarter looks too cheap fundamentally.
** Central US Weather Pattern Discussion: The forecast is little changed. An active pattern of storms passing across the US will persist within a split jet stream flow. The 10 day GFS 6z rainfall forecast is offered below.
Flooding rain potential exists across MO and the southern half of IL where rain totals could exceed 4-6.00”. The remainder of the Midwest looks to see 1-3.00” of rain which along with cold temps looks to limit planting beyond the next 24 hours in the east. Snows are also possible across the W Plains and northeast across NE into MN. The snow/cold looks to cool soils & cause limited planting progress into late next week.
Three storm systems look produce heavy amounts of rainfall with the 1st system already passing through the W Midwest.
A second storm is noted for the weekend with a third for the middle of next week. There is even a 4th system noted for the 11-15 day period.
There is a growing risk of a frost/ freeze across the W Plains with lows in the upper 20’s to lower 30’s this weekend. The frost line will extend down into TX and OK. This raises the risk of frost damage to a reproducing HRW crop. A cool trend lingers into mid May.
