Milk Prices
A volatile day in milk markets finished with a Milk Production report that surprised expectations.
Dairy products rebound was cut short to just one day.
Even though there are reasons why it seems milk futures should not be declining as much as they have, traders are anticipating milk prices based on the current domestic and international fundamentals.
After last week’s major fall in cheese prices, cheddar blocks and barrels performed much better on Monday.
Economists are predicting milk prices will sing a lower tune in 2023.
Record milk prices experienced in 2022 likely won’t carry over into 2023. Here’s why.
One never knows when milk prices have reached their peak. Many tend to wait until underlying cash shows weakness before taking a serous look at the market. However, many times some opportunity has already been lost.
Class III milk was softer with January down 22 to $18.85/cwt, February falling 8 to $18.16, and March down 10 cents to $18.22.
Dairy industry leaders say milk prices in 2022 set a new record for the year.
Spot cheese rallied on Thursday in the CME spot dairy auction after an open and closed session yesterday.
Dairy markets performed well on the first trading day following Christmas.
The recent decline of butter price has been a surprise. But there have been other years of substantial price weakness for various reasons.
Class III milk markets finished Friday slightly higher for the first time in what seems like forever.
The U.S. butter inventory finished November at 200 million pounds.
Class III Q1 milk futures averaged $19.04, down just over 17 cents.
The end of the year generally brings slower demand, and this year may be impacted more than usual due to higher food prices.
China has eased some COVID protocols, but that did not translate into significant news for dairy.
Q1 Class III markets plummeted to $19.29, giving up 33 cents on the day.
Q1 Class III Futures gave up 28 cents settling in at $19.62/cwt as Q1 All-cheese futures declined almost 2 cents to $1.9943/lb.
Class III Milk futures have sustained their rally from the end of last week, with December settling upward 7 cents at $20.48.
A sideways spot trade fed the week of falling milk prices.
Wide price swings have become more frequent over the past year. These price swings have taken place over short durations as market participants have been quick to enter and exit positions.
According to the USDA Cold Storage report, U.S. butter stocks totaled 239.6 million pounds in October, down 14.1% on the year.
Compared to last year, the 2022 herd now stands 31,000 higher.
CME spot dairy index prices performed stronger on Friday as cheese led the way.
Despite spot cheese moving lower, class III milk futures rallied.
Prior to the release of the USDA Dairy Products report, the CME spot trade and futures kept the momentum moving higher.
Dairy products were steady to higher Thursday in the CME spot dairy product auction.