Friday, June 21, 2024

Friday Morning Dairy Market Update - May Milk Production Report Arrives Today

OPENING CALLS:

Class III Milk Futures: Mixed
Class IV Milk Futures: Mixed
Butter Futures: Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures: 1 to 2 Higher
Soybean Futures: 3 to 5 Higher
Soybean Meal Futures: $2 to $4 Higher
Wheat Futures: 3 to 4 Higher

MILK:

Milk futures may trade mixed ahead of spot trading as traders will be uncertain about price direction. Class III milk futures increased despite further weakness of underlying cash. Futures were adjusting due to the sharp decline during the previous days. Futures and cash should be aligned and will react to underlying cash. The May Milk Production report will be released Friday afternoon. I estimate milk production to be 0.3% below a year ago and cow numbers to be down 2,000 head from April. Traders will react to the report as this report has increased in importance. The report was previously used as a guide to the trend, but now it has become more important for current price movement.

CHEESE:

Cheese buyers may remain cautious and wait to see if sellers need to move more supply at reduced prices. If sellers offer at higher prices, or not at all, buyers may be more aggressive and bid higher to obtain the cheese. There is little concern over cheese supply with manufacturing running on full schedules.

BUTTER:

Buyers and sellers are comfortable at the current price level. Retail demand is improving, but there is sufficient supply for that demand. Churning will slow as the cream supply tightens. Inventory is higher than a year ago reducing concern over a tight supply. The butter price is expected to be choppy.




Friday Closing Dairy Market Update - 2024 Milk Production Lower, But Herd Size Growing

MILK: Class III milk futures lost over 80 cents on the March contract this week, while Class IV lost over $1.40 from this time last week. We...