Opening Calls:
| Class III Milk Futures: | Steady to 15 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
Milk:
Continued growth in milk production, increasing production per cow and higher cow numbers does not bode well for milk prices for the next few months. It is amazing that growth of this level is taking place despite a very challenging year. Government money has provided extra capital to fund more milk production growth. Fluid milk consumption has increased significantly during the year and should continue to remain strong. However, the food service industry will suffer again as numerous states are re-imposing some measures of lockdown for a short period of time. Some schools are cancelling in-person instruction. The impact of this may not be as severe as it was earlier this year due to the industry and consumers having made adjustments after the initial lockdown. But continued changes will keep the industry in a certain level of uncertainty. However, consumers continue to look for foods that will improve their health and dairy is one of those areas that offers an array of products.
Cheese:
There is increasing interest in purchasing cheese at lower prices, but that interest is being shown as prices continue to decrease. Buyers are not aggressive but will wait for sellers to offer lower. Barrels have held steady for the past two days, but that does not mean price has found support. Sellers may have held in the chance that a stabile price may bring buyers off the sideline, thinking that a bottom may have been reached. So far, that has not taken place. There is a strong chance price could resume the downtrend.
Butter:
It will be interesting to see what the monthly Cold Storage report will show on Monday. Butter has been moving well, but churning has been active. Buyers have not been aggressive as there are plentiful supplies leaving them confident that price will remain sideways to lower. Milk powder production has been strong utilizing the higher milk supplies. This is keeping price in check even though there has been strong export demand. This market has been in an overall downtrend since July and that is expected to continue through the end of the year
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| #completecalfcare |
