** AgResource Daily Cattle Analysis: Cattle futures closed lower on Thursday, and a steady/weaker outlook is offered for early trade this morning. An early rally in cattle futures faded shortly after the open, and August cattle were below unchanged by midday, while losses were extended in the last hour of trade. Cash trade through Thursday again remained very thin, with most of Thursday’s business steady with Wednesday and $2 lower at $118. However, the bulk of this week’s business has yet to trade with bids at $115-117 and offers at $120-122.
The July Livestock Slaughter report showed June beef production at 2.279 Bil lbs or 104% of a year ago. The average steer carcass weight was up 17 Lbs from May but 12 lbs under a year ago at 853. The weekly Actual Slaughter report shows that weights have continued to improve into July. The average weight in the week of July 8th was at 866 Lbs or 9 under last year.
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 good agreement for the next 6-7 days and then depart. The new GFS weather model continues to be too amplified with upper level Troughs and is too wet. The EU model is more consistent in each run and offers limited change in the overall North American weather pattern that has now existed since early June. The rainfall forecast offered is from the EU model for the next 10 days.
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 with drier than normal weather to persist.
The mean position of the Ridge will shift to the S Plains next week and amplify northward. This will return a NW upper air flow to the Central US and cut off the flow of Gulf humidity. There will be shower chances along the northern edge of the Ridge for the next 2 days before rain chances subside. Shower chances return north late next week with the Plains and W Midwest staying in a drier trend. Arid conditions persist here.