Milk Prices
Class III and Class IV milk prices take a major hit on the chin.
Today’s GDT event was supportive, with increases in powders and cheese fueling further gains in Class III and IV futures.
Limited U.S. milk production likely will offset weakening exports.
Friday brought on late buying as the milk markets finished the week with a swing back higher.
Milk production in April was stronger than expected and may indicate output could exceed a year ago if the current pattern remains. Heightened volatility will persist as traders grapple with reality and perception.
Returning from the extended holiday weekend, dairy markets opened the week on a bearish note.
Class III futures have made an impressive increase over the past month with the June contract increasing by over $4.00 per cwt. The last time we saw this movement in an actively traded contract was in the spring of 2020.
Elimination of some Green Deal requirements for farmers could reduce declines in EU milk production going forward
Rabobank believes slow but steady dairy commodity price gains will materialize in the second half of this year.
Cow numbers are lower than a year ago, but fewer cows are being culled than anticipated. The lower availability of replacements and strong interest in beef-on-dairy may influence the level of culling.
Milk markets put in one of its quieter days over the past month on Monday.
International demand needs to pick up before U.S. milk prices can increase significantly.
It seems as if the dairy industry has taken HPAI in stride. Price fluctuations have been the result of buyers of the physical commodity on the CME daily spot market doing normal business.
Green returned to milk markets Friday as we finish the week on a strong note in a highly volatile market.
Third quarter Class III futures dropped to $18.02 per hundredweight, a 14-cent loss.
So far, HPAI has not had an impact on milk futures or the underlying cash prices. However, HPAI has not had an impact on milk futures or the underlying cash prices.
Southwest plant expansions will likely draw milk from distant regions
Class III Milk markets have been less than exciting.
Cheese continued its descent on Monday as cheddar blocks fell 2.50 cents and barrels were down 2.75 cents. Class III values also reacted in a weaker tone.
Depooling, new cheese production capacity, lower component prices all take toll on income.
The large decline in cow numbers and reduced milk production turned traders bullish, but that was short-lived. Will higher milk prices be delayed once again?
Another weak Class III performance was experienced on Monday following last week’s downturn in price.
Milk markets closed a very rough week in similar fashion on Friday.
There is great optimism that butter prices will be higher than cheese prices this year.
While the calendar flipped to 2024 weeks ago, there has been little change in dairy market sentiment since the beginning of this year. Globally, the industry continues to walk a tightrope of limited ‘new’ milk.
Recently, the USDA lowered its milk production forecast for 2024 due to lower expected output per cow, which is partly offset by higher cow inventories.
Milk markets continue to widen the Class IV/III spread as Class IV holds over $20 for 2024 calendar and Class III milk bounces around.
Futures values ended up rallying 40 cents in the February contract while March and April were up 50+ cents.
Butter drove the dairy markets higher Thursday with the CME spot trade gaining 11 cents to finish at $2.68 3/4.