** AgResource Daily Cattle Analysis: Cattle futures closed higher on Wednesday and a firm outlook is offered for early trade this morning. After a firm start on Wednesday, cattle futures were back and forth around the open and finished with modest gains.
Quieter trade unfolded in the feeder market that left May $1 higher while the rest of the market was just above unchanged. The cash feeder index was down $.08 for Wednesday and $.86 for the week at $142.12, and just barely above May that expires next week.
The Fed Cattle Exchange auction had sales of 1,621 head out of the 2,379 that were offered. The week’s sales break down was: 814 head at $135.16 for 1-9 day delivery, 570 head at $134.28 for 1-17 day delivery, and 237 head at $130.84 for 17-30 day delivery. The short delivery period sales were down $3 from last week.
Sales outside of the FCE were light and not enough to call a trend for the week, but were down $5-6 for the week on a dressed basis. Packer buyers were bidding cattle at $130, but feedlots passed on those bids, and active trade waits until later today or tomorrow.
Beef cutout values were down Wednesday morning and even weaker in the afternoon. The choice value was down $1.71 at $248.17 and the select value was $2.46 weaker at $221.93 on light to moderate demand and moderate offerings.
Fundamentally, cattle futures now look fully valued, though volatility looks to stay high. Basis is slowly narrowing, but still historically strong and encouraging feedlots to pull cattle ahead.
** US Weather Pattern Discussion: NOAA will be releasing their Long Lead Monthly Weather Forecasts this AM. The forecasts should offer some assistance in trying to decipher Central US growing weather conditions this summer.
The EU & GFS models are in good agreement for the next 7 days and offer a cool to cold and wet outlook. There remains some disparity in the forecast models in the extended range with the models having a hard time delineating a rather dynamic atmosphere. There continues to be strong hints that a wet weather profile will persist across the Plains with more normal rainfall for the E Midwest and Delta. Cool temps look to hold across the Plains and the NW Midwest, but more seasonal readings are possible across the Eastern US.
GFS’s 6z 10 Day precip forecast is attached, and should it verify some 4-5” of rain will impact KS, MO and SE IA.
Severe weather will be commonplace across the Plains this afternoon with strong winds, hail and tornadoes. A freeze will occur across C Canada with very cold air shifting southward on the weekend and lingering across the Central US for much of the 2 week forecast. Some drying is expected next week amid the southward position of the jet stream.
** 10 day GFS Rainfall Forecast:
