Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
Milk:
Class III milk futures have fallen substantially in contracts through February. It appears the selling may have run out of steam, at least until spot markets trade again. December is now running nearly $7.00 below November as it anticipates where prices could end up. Outside influences have had little effect as was initially anticipated. Pfizer has now released that their COVID-19 vaccine was 95% effective in their trial and will be seeking authorization from the FDA within days. If approved, the vaccine could begin to be distributed by the end of the year. This will have little impact on the current fundamentals in the dairy industry. It may not improve consumption, but rather change consumption venues. USDA will release the October Milk Production report Wednesday. I estimate milk production to show an increase of 1.8% over a year ago with cow numbers up 4,000 head.
Cheese:
Cheese remains in trouble due to buyers being unaggressive and showing no interest in becoming more aggressive at these lower prices. Offers are generally posted first during spot trading and offers are generally remaining at the close of spot trading. Prices have not reached a level at which buyers take a stand providing strong support. Sellers continue to move product as quickly as possible and are not interested in holding for higher prices.
Butter:
Butter consumption has been good this year despite the impact from COVID-19. However, it has not been good enough to tighten supply. Production is strong due to plentiful cream supply and the ability to easily store it and bring it back to the market to fill orders. Inventory along with fresh production has been more than sufficient to meet demand. Price may trend lower through the rest of the year as it appears inventory will close the year substantially higher than last year.
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| #completecalfcare |
