** AgResource Daily Cattle Analysis: Cattle futures closed firm on Monday, and a steady outlook is offered for early trade this morning. October cattle had resistance over the 200 day moving average and finished fractionally lower, while December cattle finished above the 50 day moving average in lackluster trading. Cash markets were quiet through Monday, and it’s possible that active trade again holds until late in the week.
Beef cutout values were higher Tuesday morning and remained strong in the afternoon. The choice cutout value was up $1.20 at $192.62 and the select value gained $1.85 to $187.70 on moderate demand and offerings. The choice rib value was up $3.12 from Friday at $298.12, and is now $4 over the low traded 2 weeks ago. The seasonal rally in rib values typically does not get underway until October. But following the collapse from record prices in June, the rib value is back under long term support at $300.
Short term trends in December cattle turned up in late August, with upside technical targets scattered from $2-5 higher. Our view is bearish on rallies as we expect record large red meat production keeps US livestock prices under pressure into late in the year.
** US Weather Pattern Discussion: The EU & GFS models are good agreement on the forecast. A Trough/Ridge pattern across North America will lead to increased rainfall chances across the Plains and W Midwest in the next 14 days, while the E Midwest and Delta holds in a drier trend. Above normal temps will push crop maturity. The Delta and Southern US will see just a few lite showers with the harvest expanding normally.
The EU model 10 day rainfall forecast is attached. Notice the heavy rains slated to drop across; MN, NE, W KS. A cold front holds across the area with the E Midwest and Delta in a much drier trend. A few showers fell across IL/IN overnight with most rainfall totals less than .50”. High temps will range from the upper 70’s to the 90s. Such warmth will push crop maturity. There is no evidence of a Midwest frost event into Oct 5th. The extended range 11-15 day forecast maintains the current flow pattern with warmth for the Central and Eastern Midwest with limited rainfall.
Hurricanes Jose and Maria are expected to stay offshore and not make US landfall. Maria is an extremely dangerous storm and should be monitored.
** EU Model 10 Day North American Rainfall Forecast:
