** AgResource Daily Cattle Analysis: Cattle futures fell to new lows on Monday amid follow through fund liquidation and the limit down pork market. A steady/weaker outlook is offered for early trade this morning. Cash markets went untraded through Monday, but given the wide distance between cash and futures markets trade could develop earlier in the week as hedged feedyards look to take advantage of strong basis opportunities.
Beef cutout values were mixed on Monday with the choice value down $1.24 at $219.80 while the select value was $1.81 higher at $210.50 on light to moderate demand and moderate offerings. Estimated slaughter margins last week surged on the lower cash trade to $187/head, the highest since July and a record for late March. The strong kill margins could help slow the decline in cash prices this week.
However, there is a significant amount of red meat headed for the US market in the coming months, which keeps the outlook bearish on rallies. June cattle could test the 2016 low at $95.00 in late spring. However, futures are oversold.
** North American Weather Pattern Discussion: The US and EU weather models are in good agreement. A fast moving zonally flowing jet stream will continue to pull numerous cold fronts southward which will maintain a below to much below normal temperature profile with moderate rain/snow across the N Plains and crop areas east of the Central Plains over the next 2 weeks. Other than some warming ahead of cold fronts, there is no evidence of any lasting warmth that would allow for a start (or acceleration) of Central US spring planting effort.
The 10 day rainfall graphic below is from the EU weather model. This forecast offers .5-1.50” of rainfall for much of the Delta, Midwest and Gulf States into mid April. Such rains are slightly above normal. However, note that the dire drought in the S and C Plains will continue with heat showing up next week with highs across TX, OK and KS reaching into the 90’s. The heat will be brief, but drought stressed HRW wheat will not be able to endure any warmth amid the lack of moisture.
The 11-15 day forecast is shifting back to a cooler temperature profile with near to above normal Midwest/Delta rainfall.
Clearly any Midwest corn planting effort will be pushed backwards into late April.
** North American 10 Day Rainfall Forecast: Limited Plains Rain into mid April
** Below To Much Below Temps Average Next 2 Weeks:
