** AgResource Daily Cattle Analysis: Cattle closed higher on Wednesday and a steady outlook is offered for early trade this morning. Futures were lower at the open following a non concerning BSE discovery, but that weaker open quickly found demand that carried cattle prices to $2+ gains into the close. Feeder cattle gained on the fat market and were $2.475-2.90 higher from August to January, while the feeder index was up $.16 at $149.16. The futures continue to trade over the index, but are also pricing in a late summer/early Autumn top in the feeder cattle market.
The week’s cash business started at the Fed Cattle Exchange, where 626 head traded at $118.30 for 1-9 day delivery and 82 head sold at $118 for 1-17 day delivery. Sales outside of the FCE were light and generally $2 lower from last week at $118. Additional trade
Our view is neutral 4th quarter cattle futures on rallies amid an outlook for record 4th quarter beef production following big summer placements. Targets for August remain scattered between $119-121.00
** US Weather Pattern Discussion: The US and EU weather models are in fair agreement. The long wave forecast pattern is similar in all model solutions, but the GFS continues to be too wet, while the EU model may be a tad too hot.
As has been the case for months, the forecast below is based on the EU model forecast. The EU model continues to hold the best forecasting track record.
There’s no real change to the Central US weather pattern for the next 2 weeks with an upper level high pressure Ridge to dominate North America from the Intermountain West to the South Central US. This will keep the mean position of the jet stream largely north and east of the major US crop areas.
This week’s heat will accelerate the loss of soil moisture and crop stress is emerging. The pattern remains drier than normal for the Plains, the western third of the Midwest and the W Delta. The chance for rain will decline for the N Plains and the W Midwest following the evening. Rainfall will impact S MN, WI, and N IL and N IN into Sunday with totals pegged at 1-3”00.
The heat returns in the closing days of July with limited rain for the Plains and W Midwest. The same pattern holds.
