Most traders are well aware of the National Oceanic and Atmospheric Administration’s weekly Drought Monitor, but there is a lesser-known NOAA monitor map showing calculated soil moisture, and its seasonal change map shows why traders are so concerned about US crops.
The picture is one of way more than normal soil moisture from central Texas into Michigan. Some of these areas received 180 millimeters or more of rain than is normal from April 30 through July 9.
Weekly crop condition reports also bear this out, reporting a decline in good-to-excellent crop ratings in key farming states as crops turn yellow from standing in water and some soybean fields don’t get planted at all.
Another iteration of the interactive NOAA soil moisture map shows a crescent-shaped area from Texas and Louisiana up and east into Ohio and Kentucky. Meteorologists called this zone “ring of fire” rains as a hot bubble perched over the Southeast and forced moisture-laden cold fronts to rise high enough into the atmosphere to rain on the edges of this bubble.
DROUGHT CONFINED TO WEST
California also received some rain in June. Amounts aren’t nearly enough to counter the extreme drought residents are experiencing, but every little bit helps.
Drought now is confined to the Rocky Mountains west with California still the heart of the dry weather.
Some pockets of unusual dryness are reported east of there, but they generally are small. The Carolinas south is another area of unusual dryness.
Soil moisture for July is predicted to remain well above average through July in those “ring-of-fire” states, fostering the rallies in futures prices. A calculated finger of extra moisture is predicted from the Texas Panhandle north into western South Dakota and south central North Dakota.
From Montana west through Washington and south into California, soil moisture is expected to remain below average.
If the forecast is accurate, pastures in the wetter areas likely will remain lush, allowing for extra grazing time.
CASH CATTLE FIRM TO HIGHER
The USDA reports cattle changing hands in its five-area market report at an average of $151.65 per cwt for live steers and $151.95 for heifers. This is up about $1 from the bulk of last week’s trading.
On a dressed basis, cattle traded this week at $239 to $241 per cwt, about steady with last week.
Many expected the increased supply and seasonal decline in demand to erode prices this week. Even many producers seemed resigned to lower prices.
The USDA’s afternoon beef cutout value was down $2.31 per cwt at $239.72, while the select value was $236.58, off $2.66. Volume was very active at 368 loads of fabricated product being sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Wednesday was $220.39 per cwt, unchanged.