Cold storage report termed bearish for butter, neutral for cheese
May butter stocks totaled 192.5 million lbs., up 11% from April 30, but 40% less than May 2013, according to USDA’s Cold Storage report, released June 23.
Total natural cheese stocks, at 1.07 billion lbs., were up 3% from April, but down 7% from May 2013. American cheese, at 656.8 million lbs., was up 1% from April, but 8% less than a year earlier.
Dave Kurzawski, FCStone, characterized the report as bearish for butter prices, and neutral on cheese.
USDA’s estimated butter stocks were well above FCStone’s expectation for 177.5 million lbs. “While the growth in stocks is mostly in line with the historical increase from April into May, it far exceeded expectations,” he said. “Given that prices have been extremely strong of late, we have to call this a bearish surprise. We do have our doubts, however, as to how much this will play out in the futures market, given the strength of the bull.”
Cheese stocks at the end of May were mostly in line with expectations, Kurzawski added. Total cheese and American cheese stocks came in slightly expectations of 1.056 billion lbs. and 655.5 million lbs., respectively. “We see little takeaway for the marketplace based upon the UDSA’s estimates today. We’ve seen very little movement on the Class III futures market since the report was released.”
Dairy replacement sales (783 head) results from Turlock, Calif., on June 20:
#1 Holstein springers: 1900-2400
#2 Holstein springers: 1400-1875
#1 Jersey springers: 1800-2225
#1 Jersey-X springers: 1800-2200
Compared to the previous week, large square bale prices were down 3%. Large round bale prices were up 4%. Sales activity was very light to light.
For Nebraska, hay prices were steady on limited alfalfa hay sales. Movement was light in most areas. Rain was reported in most areas of the state and some areas of North Eastern Nebraska were pounded by tornados and hail. Quite a lot of first cutting is still down and getting rained on; some fields are left to cut. Other producers are thinking about second cutting.
For Iowa, hay prices were steady on very limited alfalfa hay sales. There was very limited hay movement this week. A little old crop hay still getting sold to dairies. Some first cutting has been baled, some has been rained on and some just getting cut.
In South Dakota, hay prices were $33.25 lower on very light sales due to heavy rains. Demand was only moderate this week. There were very large rains across the trade area, with 6 to 12 inches for the week in many areas. Many hay growers had made their first cutting last weekend only to have it rained on very heavily, while others waited and are looking to make their first cutting this weekend. Flash flooding in southeast South Dakota, northwest Iowa, and southwest Minnesota closed many roads making it very difficult to transport hay. There was very little trade activity because of the stormy, rain, poor hay making weather.
For Missouri, alfalfa hay prices were steady on very limited alfalfa hay sales. Hay supply is moderate and demand is good. Several dry days have had balers buzzing in all regions of the state and with a reduced crop most grass hay should be put-up in short order. Alfalfa quality is average, but yields are less than expected. Sales are sluggish as both buyers and sellers wait and see what a second cutting, and beyond, may bring for supply and quality.
In Southwest Minnesota, hay prices were $4.15 higher. There were no state hay reports this week for Illinois. The first cutting of hay was 83% complete compared to the 5-year average of 80%. Pasture condition was rated at 1% very poor; 3% poor; 26% fair; 50 % good; and 20 %excellent.
For Wisconsin, hay prices were $4.05 higher on moderate trading at a quality-tested hay auction in Fennimore. Unsettled weather with periods of heavy rain prevailed this week, disrupting seasonal fieldwork but increasing soil moisture reserves for summer crops. A powerful line of severe storms moved eastward across southern Wisconsin during the late evening and early morning hours of June 16-17, producing damaging winds and tornadoes southwest of Madison. Reporters statewide commented that the first crop of alfalfa had good quality and quantity, but in some areas there was not enough time between rains to make dry hay. The first cutting of alfalfa was 74% complete. All hay conditions were reported as 89% good to excellent. Pasture conditions improved and were rated at 0% very poor; 1% poor; 13% fair; 65% good; and 21% excellent.
Straw prices in the Midwest averaged $3.75 per small square bale (range of $3.00 to $5.00); $42.50 per large square bale (range of $37.00 to $48.76); and $33.50 per large round bale (range of $20.00 to $60.00). Compared to the previous week, straw prices for small square bales were 4% higher. For large square bales, prices were 3% lower. For large round bales, prices were 12% lower.
Demand and price report as of June 20, compiled by Ken Barnett, UW-Extension. All hay prices quoted are dollars per ton FOB point of origin for alfalfa hay unless otherwise noted. The information presented in this report is compiled from public and private sales and reports in the Midwest.