** AgResource Daily Cattle Analysis: Cattle futures closed firm on Thursday and steady/higher outlook is offered for early trade this morning. June cattle were sharply lower at the open on Thursday, but found early support and spent the day moving up. June traded a $2.70 range and was higher at the close. August marked the best close and gained slightly on June, while other June spreads were higher.
More active cash trade developed through Thursday across the Plains markets, with sales mostly at $134-135, or $2-3 under last week’s 5 area weighted average price, and still $11-12 over June cattle. Sales volume looks to have been slightly better than a week ago, but still on the light side.
Beef cutout values were continued lower through Thursday and were down $.96 on choice and $.27 on select on light to moderate demand and offerings. Choice is barely higher for the week and select is lower.
Fundamentally, cattle futures now look fairly 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: The US and EU weather models are in only fair agreement this AM. The EU model is cooler compared to the GFS with additional cold intrusions from Canada. The GFS tends to offer a more zonal upper air flow in the extended range and is somewhat milder. ARC argues in favor of the EU model, but with some warmer modifications. Recent day models have been erratic in their long range solutions which diminishes our confidence. Accordingly, clients should pay more focus more on the 7-10 day forecasts.
GFS’s 6z 10 Day precip forecast is attached. The heavy rains that have battered the W Plains and W Midwest will be shifting eastward in relation to cool air continuing to infiltrate the Plains and the W Midwest. Lows in the lower to mid 40’s reach down NW TX this AM with frost across the Dakotas and N Minnesota.
Additional rains for the W Midwest will range between .5-1.50” with the E Midwest to receive heavy rain on the weekend of .5-2.50”. Drier conditions are offered next week with lite showers to be featured and rain totals of .1-.6”.
Cool to cold temperatures are forecast throughout the entire 2 week forecast. Crop development will be delayed amid the chill. Frost will be common across the N Midwest.
