AgResource Daily Cattle Analysis: Cattle futures closed lower on Tuesday, but were well over the early morning lows at the close, and a firm outlook is offered for early trade this morning. June cattle turned down shortly after the open and fell to deep losses in early trading. But the break found support and cattle were able to recover much of the early losses ahead of the close. At the close, June cattle were $1.30 over the low print of the day, though June spreads were mostly unchanged to lower.
Beef prices were mixed on Tuesday, with choice up $.48 at $249.88 while select was off $1.11 at $224.39 The choice select spread was up to a $25.49 choice premium, the highest since last June (when the beef market topped) and the 2nd highest level since 2003.
The cash markets were quiet through Tuesday with no interest trading from either side of the market. The Fed Cattle Exchange auction gets underway later this morning with 2,379 head offered for sale this week.
Fundamentally, cattle futures now look fully valued, though volatility looks to stay high.
US Weather Pattern Discussion: The EU & GFS models are in good agreement through the next 5 days, but diverge a bit thereafter. The GFS has added more rain to the Southern Plains next week (and also the in the 11-15 day period), while the EU is much drier across a bulk of the Central US beyond Sun/Mon. Both models, however, feature the return of below normal temps next week and through the final week of May. The GFS’s 2-week precip forecast is below, and should it verify some 4-5” of rain will impact TX, OK and parts of KS.
Radar maps show moderate showers dotting the Plains and W Midwest currently. This system will linger across the W Corn Belt over the next 48 hours, and will be followed by heavier showers on the weekend. Cumulative rainfall Sat-Mon is estimated in a range of 1-3”, favoring KS, NE, IA, MN and WI. Temps will maintain a summer-like bias near term, but drop rather abruptly beginning early next week. The outlook is not overly threatening to spring row crops, but wheat quality issues will be escalating, and the lack of growing degree days moving forward is noteworthy.
