** AgResource Daily Cattle Analysis: Cattle futures slipped to new lows through Wednesday’s trading, and a steady/weaker outlook is offered for early trade this morning. August cattle found selling right from the morning open, and marked the lowest close since April. Cash business has so far been very light, while the beef market continues to work lower.
The Fed Cattle Exchange sale had 92 head selling for $117.75 with 1-9 day delivery, and 337 head at $117.25 with 17-30 day delivery. Other business for the day was thin and reported $1 lower from last week at $117.
Wednesday’s Crop Progress Report showed that pasture conditions in the Northern Plains Continue to deteriorate. 57% of SD pastures were rated as poor or very poor, versus 13% last year and the average of 11%. It’s even worse in ND, where 63% of the pasture land is rated as P/VP
The downside looks limited to a couple dollars of technical risk in August cattle, while upside targets are at the 50 day moving average at $119-120, and an open chart gap at $120.425-120.60. Longer term, increased summer placement rates warrant 4th quarter sales on rallies.
** US Weather Pattern Discussion: The US & EU models are in fair agreement on the forecast. The models are having their problems deciding how much rain to produce in the Eastern Midwest in a NW Upper air flow. ARC would note that the models have all been too wet for the past 3-4 weeks and this is a trend that is likely to continue. There will be a few localized areas that receive needed moisture, but broadly, the trend of below normal rain looks to continue.
The Ridge/Trough pattern produces a NW upper air flow thru the Midwest which can produce some rain away from the core of the Ridge – or the Ohio Valley and southward to the SE US. Areas closer to the mean position of the Ridge, the Plains and W Midwest will be drier and warmer. Any extreme heat should be located west of the Miss River.
This is a concerning weather pattern that looks to remain stable into late July. The key for crop yields is whether normal rains return after July 20th?
The EU model 10 day rainfall outlook is offered to the left and maintains a disappointing rainfall trend for the Plains and the W Midwest. The heat will build across the Plains and NW Midwest with highs in the 90’s to lower 100’s.
** EU Model 10 Day Rainfall Forecast:
