** AgResource Daily Cattle Analysis: Cattle futures closed higher on Thursday, and a firm outlook is offered for early trade in the last day of the holiday shortened trading week. After a firm start on Thursday, August cattle fell sharply through the first hour, but found good support against the 100 day moving average, which carried prices higher into the close.
Cash trades on Thursday were quoted at $117-118 across the Great Plains cattle markets or $1-2 lower from last week. Beef cutout values further deflated through Thursday, with the choice valued down $2.53 at $220.05 ($32 under the June high), and select was $1.56 lower at $203.76.
The Actual Slaughter Report on Thursday with data for the week ending June 24, showed the average steer carcass weight at 855 Lbs, unchanged from the previous week, but up 23 Lbs from the seasonal low set in early May.
Thursday’s break in cattle found good demand and a firm outlook is offered ahead of the weekend. Upside targets on a further recover 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 poor agreement on the forecast. The models agree on the 5 day forecast and then disagree and diverge. The US GFS model is likely too far west with a high pressure Ridge (there was a correction back east on the 6z run) while the EU model has the mean position of the Ridge more over the Midwest and the E Plains.
The Ridge in this position would produce some real heat of 90-100 degrees across the Midwest during the heart of corn pollination. Our vote is for the EU model with some shifting of the Ridge back to the W Midwest and Plains, the same pattern that has been in existence since early June.
The EU model 10 day rainfall map to the left reflects a lack of moisture for the entire Plains along with limited totals for IA, IL and MO. This is a dry weather pattern for West Central US crops.
The key for crop yields is whether normal rains return after July 20th? If the current dry/warm weather pattern is maintained, US corn/soy yield potential could be cut 10%.
Central US heat looks to build early next week and last into the 11-15 day time frame. W Midwest/Plains high temps look to range from the 90’s to lower 100’s while temps in the east range from the 80’s to lower 90’s.
** 10 Day EU Model Rainfall Estimate: