** AgResource Daily Cattle Analysis: Cattle futures closed firm on Tuesday, and steady outlook is offered for early trade this morning. Technical selling had the market under pressure through the first half of the day and a midday break below last week’s low found strong demand that supported a recovery into the close. Feedyards used the break to cover hedges and sell steady /higher cash bids. Cattle trades were quoted at $127 in both the South and the North, with top sales quoted at $128 in NE.
The rally in the choice cutout value started several weeks ahead of normal, with choice ribs providing the strength for the 1st quarter rally, gaining every week since early January. The rib value this week at $368/cwt is nearly $30 higher than a year ago, and also the highest seasonal price on record for mid March. Supplies through the 1st quarter have been above last year, and so the next several months will be interesting as US beef production is forecast to increase 13% year over year while domestic demand tends to peak in late May/early June.
June cattle found support on a break back under the 200 day moving average, and we hold to a view of using any spring rallies for summer feedlot sales.
** South American Weather Pattern Discussion: The GFS/EU forecast models are in OK agreement this AM. Both models continue to work out the details of Argentine and Southern Brazilian rains this weekend and their run to run shifts are becoming more modest. The overnight run reduced rain totals across N Argentina and shifted some of the moisture to Cordoba and Buenos Aires. The forecast shifts would be more beneficial to Argentine and S Brazilian crops.
And there are additional rain chances in the 11-15 day period which continues to suggest that a pattern change will be occurring slowly over the next few weeks. That change should help the new Argentine winter wheat to be planted, but it won’t offer much assistance to summer row crops that have been suffering from 5 months of acute dryness/drought.
The EU model 10-day rainfall forecast is attached. Isolated showers are due across Argentina on Thursday AM with more robust showers to occur on the weekend. Several cold fronts that pass from Saturday into early Monday look to produce .5-2.50” of rain across the northern half of Argentina with .2-1.00” totals to the west. S Brazil will also receive a needed rain with totals of .5-2.50”. Near normal rains occur across N and C Brazil.
** Better Rains for S and W Argentina:
