Wednesday Morning Dairy Market Update - Market Uncertainty Impacts Trading Activity

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 6 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Higher
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	$4 to $5 Higher
Wheat Futures:	9 to 10 Higher

MILK:

Class IV futures continue to widen the gap between them and Class III futures. The September and October contracts are at a $2.00 price spread. Cheese prices remain choppy while nonfat dry milk remains supported. There is no shortage of milk and output is expected to remain higher than last year through the rest of the year. The decline in cattle prices is receiving more attention as it is impacting calf prices, which have been a significant source of income for the farm. The current weakness in cattle prices may be temporary, but the impact is significant, and the duration is uncertain.

CHEESE:

There is not much to be expected from the cheese market. Supply and demand seem balanced, keeping prices lower and in a range. The inability of prices to trend higher at this time of year is cause for concern. The hope is for demand to improve significantly and reduce inventory more than usual.

BUTTER:

The butter price remains in an overall downtrend even though there have been some price bounces. Strong support remains elusive. Manufacturers continue to offer substantial volumes of butter on the spot market. Buyers remain confident supplies will remain sufficient for demand. 

Tuesday Closing Dairy Market Update - Canada Reciprocates With Tariffs Including Dairy

GENERAL OVERVIEW:

Class IV futures gained back much of what had been lost on Monday as the market continues with choppy trade. This has been the pattern, and it is expected to continue. Increasing fluid demand due to the reopening of schools is not tightening the supply of milk for manufacturing.

MILK:

There is no shortage of milk. The spot milk supply is tight in some areas, resulting in prices above class, but it is still available for those who need to purchase extra supply from the spot market. Cooler weather is improving cow comfort and thereby increasing milk output. So far, increasing demand has been met without difficulty. Seasonal buying should increase at this time of year as buyers look ahead to fall and holiday demand. So far, increased buying has been met with sufficient supplies. Canada reciprocated with retaliatory tariffs on about $20 billion worth of American goods, including steel, dairy products, appliances, and farm equipment, as a result of the 50% tariffs put on Canadian goods on Monday. The impact this will have on dairy prices is uncertain, but it certainly will have some impact on dairy trade with Canada.

AVERAGE CLASS III PRICES:

3 Month:	$16.59
6 Month:	$16.88
9 Month:	$17.05
12 Month:	$17.20

CHEESE:

The cheese prices are stuck. There is little reason for prices to increase if there is sufficient supply to meet demand. Inventory is in line with a year ago, leaving supply and demand balanced. Cheese production remains steady as milk receipts improve.

BUTTER:

The butter price continues to chop around, with the overall price remaining in a downtrend. Manufacturers continue to offer substantial volumes of butter on the daily spot market. This keeps the upside price potential limited as buyers see little reason to be aggressive except when needing to fill immediate orders. There is no near-term concern over supply.

OUTSIDE MARKETS SUMMARY:

December corn closed up 8.00 cents per bushel at $5.2350, November soybeans closed up 13.50 cents at $12.3775, and December soybean meal closed up $.60 per ton at $329.20. December Chicago wheat closed up 3.75 cents at $7.0325. October live cattle closed down $2.65 at $210.95. October crude oil is down $3.93 per barrel at $81.08. The Dow Jones Industrial Average is up 160 points at 53,577, with the NASDAQ up 171 points at 26,151.

 

Tuesday Midday Dairy Market Summary - Nonfat Dry Milk Regains the Loss

OUTSIDE MARKETS SUMMARY:

CORN:	9 Higher
SOYBEANS:	9 Higher
SOYBEAN MEAL:	$0.70 Lower
LIVE CATTLE:	$1.62 Lower
DOW JONES:	105 Points Higher
NASDAQ:	136 Points Higher
CRUDE OIL:	$2.71 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.5275 and $1.5750, respectively. There were three loads of blocks changing hands. The dry whey price increased 1.00 cent to close at 71.25 cents with no loads traded. Buyers for dry whey could not entice a seller to match the higher bid. Class III futures are 1 -- 13 cents lower. The butter price increased 3.50 cents to close at $1.4800 with 23 loads traded. This does not indicate a change in trend, but an aggressive buying bounce. There were 18 unfilled bids and 71 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 3.50 cents to close at $1.8100 with one load traded. Class IV futures are 12 -- 27 cents higher. Butter futures are 1.50 cents lower to 3.30 cents higher. Dry whey futures are 0.50 cent lower to 0.50 cent higher. Cheese futures are 0.80 cent lower to 0.20 cent higher. Nonfat dry milk futures are 0.32 to 4.07 cents higher.