** AgResource Daily Cattle Analysis: Cattle futures closed higher on Thursday and a steady outlook is offered for early trade this morning. April cattle fell to new lows for the week just after the open, but that early break found good to demand that lifted the market into late in the day.
Cash markets were largely quiet with, only light sales reported in the W Cornbelt at $124 or $1 lower. However, most of the week’s business has yet to develop. On Thursday bids were quoted at $122 with offers at $126.00.
The weekly US Export Sales Report with data through the week ending Jan 3rd confirmed that exports and sales remained slow through the holiday season. There was a record amount of 2018 sales that were rolled forward into the current year, and outstanding 2019 sales start the year record large. The Feb WASDE report forecast annual 2019 beef exports would increase 2% in the year ahead, and the early year sales total loosely supports that idea.
Support in April cattle is at the 50-day moving average, just under $126. ARC continues to advise summer hedges on rallies for producers.
** South American Weather Pattern Discussion: The EU/GFS models are in good agreement. The forecast calls for needed rain across the entirety of Brazil while a dry pattern holds across Argentina for the next 7-8 days. There are clear signals of Argentine rains that are being pulled forward to the 8-10 day period which raises our confidence in their ultimate development. This is a new positive development for Argentine crops.
The 10-day EU model rainfall forecast is attached. Rains will fall almost daily across Brazil. The Brazilian winter corn crop is being planted and the forecast is favorable with enough rain for corn seed germination. High temps range from the 80’s to the lower 90’s. Soil moisture is still low in some key crop areas; the moisture demands of the just seeded corn crop is low for another few weeks.
Argentina’s forecast offers a nice mix of sunshine/near normal temps over the next 8 days. The forecast is warm which will accelerate soil moisture losses. Yet the prospect for rains between February 22-25th would be ideal. These rains will be critical for Argentine crops to hold their above normal trend yield potential. Any heat is across Western Argentina.
** 10 Day South American Rainfall Estimate: Improved Rains for Argentina
