Tuesday’s trading session proved to be a tough day for unhedged dairy producers. A limit move lower in milk markets had an insult added to its injury with a limit higher trade in corn and $15/ton jump in soybean meal pricing. Class III milk prices declined $0.75/cwt in both February and March while April fell $0.57/cwt and May was down $.38/cwt. The remaining months in 2021 ranged from $0.05 to $0.15/cwt in the red. Class IV milk market also had a weaker tone to it.
CME spot dairy auction results had minimal changes despite the crash in Class III price. Block cheese softened a half cent to $1.9575/lb while barrels were reduced a quarter cent and ended at $1.65/lb. Butter, whey, and nonfat dry milk were all unchanged.
Grains prices added significant value to their prices following a few USDA reports that were released today. The first was the World Agricultural Supply and Demand Estimates Report (WASDE) which showed a cut in both corn and soybean yields as well as ending stocks. USDA printed corn yield at 172 bushels/acre, down from 175.8 in the December report and beneath the lowest guess of 173.8. Soybean yield was down a half of a bushel from the previous report but well within the average guesses. Ending stocks were also within the range of analyst guesses but lower than the previous months. The Grain Stocks report also supported corn as 11.322 billion bushels were reported by USDA compared to a low-end guess of 11.59 billion. No real surprises on quarterly stocks on soybeans in this report. Either way, corn prices rose 25 cents/bu while soybeans were up 45 cents.
