Monday, March 18, 2024

Monday Closing Dairy Market Update - Mixed Pattern Ends Day's Trading

MILK

There is a developing story about milk cows and production being impacted in some areas, but more information is being gathered. It is unclear what impact it could have on the market in the near term. For now, there is sufficient supply for demand with milk production improving due to spring flush.

The growth in milk production may not be as great as last year, but stronger production might continue for a longer time than usual, depending on the weather. For now, the industry does not think milk prices will have much upside in the near term.

AVERAGE CLASS III PRICES

3 Month: $16.36
6 Month: $17.10
9 Month: $17.59
12 Month: $17.71

CHEESE

Block cheese price could not hold the early gain during spot trading and fell into negative territory, keeping a lid on the futures market. Dry whey declines also added to the weight on futures. Barrels are in a stronger demand posture pushing back above blocks. This does not indicate cheese prices will trend higher but will keep the market choppy as it searches for solid support. Increasing milk production should keep cheese output sufficient for demand for the near term unless demand increases more than expected over the next few months.

BUTTER

Price may have reached resistance again at the top end of the range. Much of the butter for the Easter season has been shipped with some fill-in orders to be shipped over the next week. Buyers have been preparing for the season earlier and need not be overly aggressive now. The butter inventory remains below a year ago with exports running below a year ago. Domestic demand remains strong.

OUTSIDE MARKETS SUMMARY

May corn closed down 0.75 cent per bushel at $4.3600, May soybeans closed down 10.50 cents at $11.8775 and May soybean meal closed down $2.80 per ton at $331.90. May Chicago wheat closed up 14.25 cents at $5.4275. April live cattle closed up $1.33 at $188.58. April crude oil is up $1.77 per barrel at $82.81. The Dow Jones Industrial Average is up 76 points at 38,790 with the NASDAQ up 130 points at 16,103.




Monday Midday Dairy Market Summary - Blocks and Barrels Diverge

OUTSIDE MARKETS SUMMARY:

CORN: 1 Lower
SOYBEANS: 7 Lower
SOYBEAN MEAL: $1.00 Lower
LIVE CATTLE: $1.32 Higher
DOW JONES: 142 Points Higher
NASDAQ: 157 Points Higher
CRUDE OIL: $1.64 Higher

MIDDAY MARKET UPDATE:

Block cheese price initially increased a penny before sellers became more aggressive, resulting in the price closing 2 cents lower with three loads traded. Barrel cheese prices increased 5.75 cents, closing at $1.50 with one load traded. Dry whey price declined 1.50 cents, closing at 43 cents with two loads traded. Class III futures are 1 cent lower to 9 cents higher with moderate trading activity. The butter price slipped 0.25 cent, closing at $2.28 with no loads traded. Grade A nonfat dry milk price declined 1.75 cents, closing at $1.1450 with five loads traded. Class IV futures are trading steady with activity only in the April and November contracts. Butter futures are 0.97 cent lower to 1.25 cents higher. Dry whey futures are 0.55 cent lower to 0.15 cent higher.




Monday Morning Dairy Market Update - Milk Futures Indicate Price Uncertainty

OPENING CALLS:

Class III Milk Futures: 2 to 8 Higher
Class IV Milk Futures: Mixed
Butter Futures: Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures: 1 to 2 Higher
Soybean Futures: 5 to 7 Lower
Soybean Meal Futures: $1 to $2 Lower
Wheat Futures: 5 to 7 Higher

MILK:

It will be interesting to see whether Class III milk futures bounce back Monday after the decline Friday. Overnight trade showed some interesting activity with the June and September contracts showing prices 34 and 18 cents higher, respectively. Those must have been market orders as the bid and offers are wide with bids nearly 30 cents lower. All the contracts through the end of the year posted wide bids and offers. This indicates the uncertainty of traders over underlying cash to begin the week. Trading activity ahead of spot trading will be light. The milk production report will be released Wednesday with traders focusing on cow numbers.

CHEESE:

Cheese prices need to regain a lot of ground to move back to the levels they were at two weeks ago. So even some gains in prices may not provide much strength for futures. The market needs to prove itself before traders might get excited again. Cheese production is holding well providing sufficient supply for demand.

BUTTER:

The recent trend is sideways while the overall trend is higher. Many of the orders for the Easter season have been filled with some yet to be shipped this week. Then it will be up to the level of demand to indicate the strength of the price after the holiday season. For now, the market might remain choppy.




Monday Closing Dairy Market Update - Mixed Pattern Ends Day's Trading

MILK There is a developing story about milk cows and production being impacted in some areas, but more information is being gathered...