** AgResource Daily Cattle Analysis: Liquidation in the cattle market continued through Wednesday’s trading, and steady/weaker outlook is offered for early trade this morning. October cattle were weaker at the open on Wednesday and steadily worked lower into late in the day.
The Fed Cattle Exchange had 518 head trade out of the 1,659 head that were offered, with an average price $115.04 versus last week’s 5 area average of $117.30. Elsewhere in the Plains cattle markets, live sales were reported from $114.50-115, and carcass based sales were at $185. August cattle settled $5 under Wednesday’s cash trade and October was $7 under.
The beef market was lightly mixed Wednesday morning and lower in the afternoon. The choice value finished down $.59 at $201.66 and select was $.25 weaker at $196.61 on light to moderate demand and moderate offerings. The choice/select spread has narrowed to just a $5.05 choice premium, after reaching a 14 year high of $31 back in June.
The next major technical level for October cattle is now at the contract’s 200 day moving average, which is now just $1 lower at $107. Fundamentally, we think the market is fairly valued, and we are bearish on $4-6.00 rallies.
** Central US Weather Discussion: The US/EU weather models are in fair agreement for the next 10 days. A blocking Ridge pattern will hold across Central Canada for at least the next 8 days, with some progression to the east by August 17th. The eastward shift of the Ridge and its weakening would allow for a weak jet stream to form across S Canada and the N Lake States. However, the availability of upper air moisture is low and rains will only be widely scattered. Our confidence in the prospect for rain across the drier areas of the Midwest after August 18th is moderate. It’s something that we’ll closely follow for clients in the days ahead.
The fat areas of the Midwest will hold in a below normal precip pattern with just isolated rains over the next 7-8 days. Better rain chances are offered in the 9-14 day period with the best rains favoring the E Midwest. The 10 day rainfall map offered by the EU model reflects these rains after Aug 18th.
Temps will be cooler than normal with highs ranging from the 70’s to the lower 80’s. Warming returns in the 10-15 day period as the warmth in the west tries to push east. Crops are in immediate need of rain in IA and IL.
** EU Model 10 Day Rainfall Forecast:
