Archive for Dairy Markets

Dairy prices continued to fall Thursday in Chicago

At the Chicago Mercantile Exchange Thursday, dairy prices continued to fall. Class Three June milk was down $.06 at  $15.26. July was down $.14 at $14.86. August was down $.07 to $15.49.  September was down $.02 to $16.07. The milk futures from October through next May ranged from ten cents lower to one cent higher.

Grade AA Butter was up $.0025 at $2.29 per pound.  No sales were recorded. Barrels were up $.0175 at $1.31 per pound.  Thirty-four carloads sold from $1.2825 to $1.3275. There were also 22 carloads sold Wednesday.  Forty-pound blocks were down $.01 to $1.4950 per pound.  Three carloads sold from $1.4950 to $1.5050.  Nonfat dry milk was up $.0025 at $.77 per pound. Eight carloads sold from $.76 to $.77. Dry whey was unchanged at $.39 cents per pound.  No sales were recorded.

CME Milk Futures Resume Downward Trend Wednesday

At the Chicago Mercantile Exchange Wednesday, milk futures dropped again, after a one-day break from sliding prices.  Class Three June milk was unchanged at  $15.32. July was down $.12 at $15.00. August was down $.06 to $15.56.  September was down $.03 to $16.09. The milk futures from October through next May ranged from one two cents lower to two cents higher.

Grade AA Butter was down $.0225 at $2.2875 per pound.  One carload sold at that price. Barrels were down $.0325 at $1.2925 per pound.  Twenty-Two carloads sold from $1.2875 to $1.33. Forty-pound blocks were down $.0625 to $1.5050 per pound.  One carload sold at that price. Nonfat dry milk was up $.0150 at $.7675 per pound. Nine carloads sold from $.7550 to $.7675. Dry whey was down $.0050 at $.39 cents per pound.  No sales were recorded.

Milk Futures Stop Slide Cash Dairy Prices Lower Tuesday in Chicago

At the Chicago Mercantile Exchange Tuesday, cash dairy prices fell and most milk futures stopped their downward slide.

Class Three June milk was down $.01 to $15.32. July was down $.07 at $15.12.  August was up $.06 to $15.62. September was up $.09 to $16.12. The milk futures from October through next May ranged from one cent lower to five cents higher.

Grade AA Butter was down $.0125 at $2.31 per pound.  Six carloads sold from $2.3075 to $2.32. Barrels were down $.07 at $1.3250 per pound.  Ten carloads sold from $1.33 to $1.38.  Forty-pound blocks were down $.0275 to $1.5675 per pound.  No sales were recorded. Nonfat dry milk was down $$.0075 at $.7525 per pound. One carload sold at that price. Dry whey was down $.0050 at $.3950 cents per pound.  No sales were recorded.

Milk Futures Sharply Down Cash Prices Mixed in Chicago Monday

At the Chicago Mercantile Exchange Monday, cash dairy prices were mixed and milk futures were sharply down again. Class Three June milk was down $.04 to $15.33. July was down $.24 at $15.19.  August was down $.36 to $15.56. September was down $.36 to $16.03. The milk futures from October through next May ranged from nineteen to twenty-six cents lower.

Grade AA Butter was down $.03 at $2.3225 per pound.  No sales were recorded. Barrels were down $.0550 at $1.3950 per pound.  Eight carloads sold from $1.3975 to $1.42.  Forty-pound blocks were unchanged at $1.5950 per pound.  No sales were recorded. Nonfat dry milk was down $$.0275 at $.76 per pound. One carload sold at $.7650. Dry whey was down $.01 at $.40 cents per pound.  No sales were recorded.

Dairy Markets Lower Wednesday in Chicago

At the Chicago Mercantile Exchange Wednesday, Class III milk futures closed down three to eight cents while cash dairy finished steady to lower. June milk closed down three cents at $15.37.  July fell $0.08 to $15.75.  August milk weakened six cents to $16.35.  And September futures were down a nickel at $16.71.  The October through January contracts were three to four cents lower at the close.

Grade AA butter down $0.0125 at $2.3575 Wednesday. Blocks unchanged Wednesday at $1.64. Barrels steady at $1.54. Nonfat dry milk down $0.0075 at $0.78. Dry weigh down $0.0075 at $0.41.  One trade at $0.41.

Dairy Markets Down in Chicago Tuesday

At the Chicago Mercantile Exchange Tuesday, dairy markets were mostly down. Class Three June milk was down $.03 to $15.40. July was down $.07 at $15.93.  August was down $.11 to $16.41. September was down $.05 to $16.76. The milk futures from October through next May ranged from zero to three cents lower.

Grade AA Butter was down $.02 at $2.37 per pound.  Four carloads sold from $1.37 to $1.3750. Barrels were down $.0250 at $1.54 per pound.  Fifteen carloads sold from $1.54 to $1.5450. Forty-pound blocks were up $.0050 to $1.64 per pound.  Two carloads sold at $1.6375 and $1.64. Nonfat dry milk was down $.0050 at $.7875 per pound. Four carloads sold from $.7875 to $.7925. Dry whey was unchanged at $.4175 cents per pound.  Two carloads sold at $.4150 and $.4175.

Milk futures down, cash cheese flat Monday in Chicago

At the Chicago Mercantile Exchange Monday, milk futures were down and cash cheese flat. Class Three June milk was down $.04 to $15.43. July was down $.14 at $15.90.  August was down $.10 to $16.52. September was down $.10 to $16.81. The milk futures from October through next May ranged from seven to twelve cents lower.

Grade AA Butter was unchanged at $2.39 per pound.  No sales were recorded. Barrels were unchanged at $1.5650 per pound.  No sales were recorded.  Forty-pound blocks were unchanged at $1.6350 per pound.  No sales were recorded. Nonfat dry milk was down $.0125 at $.7925 per pound. Four carloads sold from $.7925 to $.80. Dry whey was up $.0050 at $.4175 cents per pound.  One sale was made at that price.

Dairy markets Up for 2nd Day in a Row Thursday in Chicago

At the Chicago Mercantile Exchange Thursday, dairy markets were up for a second day following a four-day downturn. Class Three June milk was up $.11 to $15.42. July was up $.15 to $16.04.  August was up $.20 to $16.61. September was up $.19 to $16.87. The milk futures from October through next May ranged from twelve to twenty-one cents higher.

Grade AA Butter was up $.01 to $2.39 per pound.  Three carloads sold from $2.38 to $2.39. Barrels were up $.0125 to $1.5175 per pound.  Two carloads were sold from $1.5050 to $1.51. Forty-pound blocks were up $.02 at $1.60 per pound.  Ten carloads sold from $1.5825 to $1.6050. Nonfat dry milk was unchanged at $.8125 per pound. No sales were recorded. Dry whey was up $.0025 at $.4075 cents per pound.  No sales were recorded.

Unpromising start to new dairy season as global prices slide

Global dairy prices at the latest Global Dairy Trade (GDT) auction fell 1.3 per cent to US$3487 in a discouraging start to the new season.

Whole milk powder (WMP) prices were down 1.1 per cent to US$3205, though regular grade WMP to ship in August was practically unchanged.  

Analysts had been picking either flat or slightly declining prices because of higher volumes being offered, and because premiums of futures over previous GDT have shrunk. 

Favourable weather saw a rise in Fonterra’s milk collection by 3 per cent during April, but for the 2017-18 season from June to April, New Zealand farmers produced 2 per cent less milk than the year before.  

The latest result contrasted with the final auction for the season last month when prices lifted1.9 per cent overall to reach US$3637.

Federated Farmers dairy chairman Chris Lewis said the rise in the value of the New Zealand dollar would contribute to even lower returns, but such factors were sometimes out of the country’s control. 

Some analysts have been picking the dollar to fall to 65c against the US, but in fact it has recently lifted to just over the 70c mark. 

“What with GDT falling slightly and the dollar going up, some accountants will be looking at their balance sheets,” Lewis said.

Farmers were used to spikes and dips in prices, but as long as the overall value remained at the $3300 level, they would be happy. 

Most processors had delivered positive farmgate forecasts in recent weeks in the region of $7 per kilogram of milksolids. Lewis sounded a note of caution, saying it was better to under promise and then over deliver.

The most dramatic change in the overnight auction was seen in butter milk powder, which jumped by 17.7 per cent.

AgriHQ pointed out there was a greater volume of WMP on offer than had been forecast. WMP volumes for the auction were lifted 7.6 per cent from forecasts. Buyers bought more WMP than they did at the May 15 event, but they were unwilling to pay more for it.

Butter prices fell 3.5 per cent, anhydrous milkfat was down 1.7 per cent. Skim milk powder prices were up marginally, lifting 0.3 per cent.

Cheddar prices were down 3.6 per cent, lactose lifted 3.9 per cent and rennet casein prices rose 2.7 per cent.

 

Source: Stuff

Dairy Markets Slightly Higher After Four Day Side

At the Chicago Mercantile Exchange Wednesday, the markets took a slight turn higher after four straight days of diving dairy prices. Class Three June milk was up $.05 to $15.31. July was up $.16 to $15.89.  August was up $.13 to $16.41. September was up $.15 to $16.68. The milk futures from October through next May ranged from zero to fourteen cents higher.

Grade AA Butter was up $.0175 to $2.38 per pound.  Four carloads sold from $2.37 to $2.38. Barrels were unchanged at $1.5050 per pound.  Eighteen carloads were sold from $1.4850 to $1.5050. Forty-pound blocks were up $.0050 at $1.58 per pound.  Ten carloads sold from $1.5725 to $1.58. Nonfat dry milk was up $.0025 at $.8125 per pound. Three carloads sold at that price. Dry whey was up $.0025 at $.4050 cents per pound.  One carload sold at that price.

Dairy cash and futures markets lower Tuesday in Chicago

At the Chicago Mercantile Exchange Tuesday, cash dairy markets were lower and milk futures sharply lower as prices fell for a fourth straight trading session. Class Three June milk was down $.12 to $15.26. July was down $.29 to $15.73.  August was down $.37 to $16.28. September was down $.33 to $16.53. The milk futures from October through next May ranged from two to twenty-eight cents lower.

Grade AA Butter was down $.0150 to $2.3625 per pound.  Six carloads sold from $2.36 to $2.3625. Barrels were down $.0150 to $1.5050 per pound.  Four carloads were sold from $1.50 to $1.5050.  Forty-pound blocks were down $.0175 at $1.5750 per pound.  Thirteen carloads sold from $1.5725 to $1.5750. Nonfat dry milk was down $.0050 at $.81 per pound. Three carloads sold at that price. Dry whey was up $.0025 at $.4025 cents per pound.  One carload sold at that price.

Dairy markets lower for third straight trading day in Chicago

At the Chicago Mercantile Exchange, dairy markets were lower for a third straight trading session Monday.  Class Three June milk was down $.11 to $15.38. July was down $.21 to $16.02.  August was down $.14 to $16.65. September was down $.10 to $16.86. The milk futures from October through next May ranged from three to nine cents lower.

Grade AA Butter was unchanged at $2.3775 per pound.  Unlike Friday’s Thirty-two carloads, no trades were made Monday. Barrels were unchanged at $1.52 per pound.  No barrels were sold Monday. Forty-pound blocks were down $.0050 at $1.5925 per pound.  Two carloads sold at $1.5925 and $1.5950. Nonfat dry milk was down $.01 at $.8150 per pound. Three carloads sold from $.8150 to $.82. Dry whey was up $.0150 at $.40 cents per pound.  Two carloads sold at $.3925 and $.40.

Fonterra Australia announces forecast closing farmgate milk price range of $5.50 to $6.20/KgMS for the 2018/19 season

Fonterra Australia has today advised farmers its forecast closing farmgate milk price for the 2018/19 season is in the range of $5.50 to $6.20 per kilogram of milk solids (kgMS).

The range is based on market indications which show a continued positive global supply and demand picture. Demand is expected to remain strong – especially from China and for butter and AMF – and the global dairy market’s current prices are expected to continue throughout the new season.

Fonterra Australia Managing Director René Dedoncker said Fonterra remains committed to paying its farmers a price that is market-based, competitive, and sustainable.

“We are keeping to our promise to provide farmers with clear market-based signals in advance of the new season to allow them budget and plan.

“Earlier this year we launched Farm Source in Australia – a comprehensive package of tools and services to assist farmers with farm business management – which is changing the way we work with our farmers. The Farm Source online income estimator will be available in the coming weeks to provide our farmers with the ability to scenario plan for next season.

“Our business is in good shape as we continue to focus on driving sustainable performance.

“We’re building long-term relationships with strategic partners, and with cheese markets like China and Japan, to tap into growing domestic and global demand which is providing more opportunities to grow the value of our farmers’ milk. At the same time, we continue to make efficiency improvements which means we have the right asset base to play to our strengths in cheese, whey and nutritionals.

We are confident that our strategy and the strength of our three business channels – Consumer, Foodservice and Ingredients – will enable us to continue to pay a competitive price next season. We expect seasonal growth from our existing farmers to continue next season which will meet our customer demand.

“We will announce our opening price in the coming weeks,” concluded Mr Dedoncker.

 

SourceFonterra

Dairy Markets Lower Thursday in Chicago

At the Chicago Mercantile Exchange, dairy markets were lower Thursday. Class Three June milk was down $.09 to $15.57. July was down $.11 to $16.38.  August was down $.06 to $16.87. September was down $.04 to $17.01. The milk futures from October through next May ranged from one to nine cents lower.

Grade AA Butter was down $.0350 at $2.39 per pound.  Fourteen carloads sold from $2.39 to $2.4150. Barrels were down $.0125 at $1.5450 per pound.  Twelve carloads sold from $1.5450 to $1.5550.  Forty-pound blocks were unchanged at $1.6075 per pound.  No sales were recorded. Nonfat dry milk was down $.0150 at $.8250 per pound. One carload sold at that price. Dry whey was up $.0125 at $.39 cents per pound.  Two carloads sold at $.3875 and $.39.

Sairy markets mostly lower in Chicago

At the Chicago Mercantile Exchange, dairy markets were mostly lower except for butter and cheese barrels Wednesday. Class Three May milk was unchanged at $15.17 a hundredweight. June was down $.10 to $15.66. July was down $.02 to $16.49.  August was up $.01 to $16.93. The milk futures from September through next April ranged from six cents lower to two cents higher.

Grade AA Butter was up $.0075 at $2.4250 per pound.  Fourteen carloads sold from $2.4150 to $2.4250. Barrels were up $.0025 at $1.5575 per pound.  Nine carloads sold from $1.5525 to $1.5575. Forty-pound blocks were down $.0125 to  $1.6075 per pound. One carload sold at that price. Nonfat dry milk was down $.0050 at $.84 per pound. One carload sold at that price. Dry whey was unchanged at $.3775 cents per pound.  Five carloads sold from $.3750 to $.3775.

Dairy Markets Higher Tuesday in Chicago

At the Chicago Mercantile Exchange, dairy markets were higher Tuesday. Class Three May milk was unchanged at $15.17 a hundredweight. June was up $.09 to $15.76. July was up $.16 to $16.51.  August was up $.17 to $16.92. The milk futures from September through next April ranged from three to thirteen cents higher.

Grade AA Butter was up $.0025 at $2.4175 per pound.  Five carloads sold from $2.4175 to $2.42. Barrels were up $.01 at $1.5550 per pound.  Five carloads sold from $1.5450 to $1.5550. Forty-pound blocks were up $.01 to  $1.62 per pound. One carload sold at that price. Nonfat dry milk was up $.0025 at $.8450 per pound. Four carloads sold from $.84 to $.8450. Dry whey was up $.0050 to $.3775 cents per pound.  One carload sold at that price.

CWT Assists with 7.1 Million Pounds of Cheese, Butter and Whole Milk Powder Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted offers of export assistance from CWT that helped them capture contracts to sell 381,400 pounds (173 metric tons) of Cheddar cheese, 104,720 pounds (48 metric tons) of butter and 6.614 million pounds (3,000 metric tons) of whole milk powder, to customers in Asia, Central America, and Europe. The product has been contracted for delivery in the period from June through October 2018.

CWT-assisted member cooperative 2018 export sales total 35.157 million pounds of American-type cheeses, 10.698 million pounds of butter (82% milkfat) and 7.538 million pounds of whole milk powder to 25 countries on five continents. These sales are the equivalent of 620.228 million pounds of milk on a milkfat basis.

This activity reflects CWT management beginning the process of implementing the strategic plan reviewed by the CWT Committee in March. The changes will enhance the effectiveness of the program and facilitate member export opportunities.

Assisting CWT members through the Export Assistance program in the long term helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

 

Milk futures mixed Thursday at CME

At the Chicago Mercantile Exchange, Class III milk futures closed mixed Thursday supported slightly by strong international markets and export demand. The USDA reports bi-weekly whole and skim milk powder, cheddar cheese and butter prices are improving in both Western Europe and Oceania regions. May milk closed down a nickel at $15.19. June milk was a penny higher at $15.76. July milk down $0.03 at $16.42. August closed down a penny at $16.79. September through next April contracts closed four cents lower to unchanged.

Grade AA Butter closed up $0.0175 at $2.4025. Eight loads sold ranging from $2.3850 to $2.4025. Blocks were down $0.0050 at $1.6210. Barrels were unchanged at $1.55. Seven trades were made ranging from $1.5475 to $1.55. Nonfat dry milk closed up $0.0025 at $0.8425. Five trades were made ranging from $0.8375 to $0.8450. Dry whey was a penny higher at $0.37.

Fonterra’s forecast $7 farmer payout one of the best this decade

Fonterra’s chief executive Theo Spierings and chairman John Wilson say financial results did not go to plan in the third quarter.

Fonterra has announced an opening forecast price to its farmers of $7 per kilogram of milksolids for the 2018-19 season, and increased its 2017-18 forecast farmgate price by 20c cents to $6.75 per kgMS. 

It also announced its third quarter financial results, which it described as “not the results it had planned”. 

Although higher prices lifted its revenue to $14.8 billion for the first nine months of 2017-18, up seven per cent on the same period last year, its total milk volumes had fallen 5 per cent to 16 billion liquid milk equivalents.

This resulted in its gross margins declining to 16 per cent from 18 per cent for the first nine months of the year, compared to the same period last year.

While it will not announce its forecast earnings per share for the 2018-19 season forecast until July, Fonterra has revised its forecast normalised earnings per share guidance range for the 2017-18 season down to 25-30c per share and its forecast dividend range for the full year down to 15-20 cents per share.

Fonterra’s 2018-19 opening price forecast for farmers is ahead of last season’s closing price by 25c.

Chairman John Wilson said the revised earnings forecast for 2017-18 was disappointing for shareholders and unitholders.

“However, the total forecast cash payout for farmers increases to $6.90-$6.95 per kgMS which is the third highest payout this decade.”

Chief executive Theo Spierings said the co-operative had expected a more successful second half of the year but this had not happened because of a rapid rise in input costs late in the season into its value-add business. 

“With the increase in the price of milk fats we have also seen continued demand towards products with a lower fat composition, sustained competition in Greater China’s foodservice market and further constraints in some Asian markets limiting our ability to pass through costs.”

The payment of damages to Danone of $183 million, and the write down of its Beingmate investment by $405m meant Fonterra’s gearing ratio was expected to be above its target 40-45 per cent range.

“While the strong milk price is good for our farmers, it does make the remainder of the year challenging for the business. We remain committed to maximising the total payout for our farmers and value for our unitholders by delivering the best possible earnings,” Spierings said. 

Federated Farmers dairy chairman Chris Lewis said farmers would be in a position to do more environment work, continue to catch up on deferred maintenance from previous low payouts and look at possible pay increases for staff.

He said the payout increase could be credited partly to the devaluation of the dollar by four cents to as low as 68c against the United States currency the past month and commodity prices turning around. The baseline commodity of whole milk powder was at about US$3200 a tonne from US$2700-$3200 a year ago.

Milk powder demand is up around the world with a resurgence of butter and cream prices.

Lewis said the rise of televised cooking programmes such as My Kitchen Rules was promoting cooking at home with healthy, raw ingredients and dairy farmers would benefit from this.

A higher payout would be little consolation for farmers feeling the “pain” of Mycoplasma bovis cattle disease, he said.

“They haven’t the animals to milk and this is just adding to their frustration of moving away from future profits. It’s very sad and they are taking one for the team.”

Farmers received compensation for lost earnings until a farm was re-stocked, but that could take many months and there were still bills to pay.

“They have families to feed and how good is your credit line? But I think today is a celebration and this is positive news.”

Higher commodity prices would make it harder to increase share earnings as ingredients would cost more, but this was a good tension for Fonterra to improve value-added business, he said

Source: stuff.co.nz

Dairy Market Update – Markets Have Definitely Turned a Corner

With global milk output growing at much slower rates (just over 1% for March, the level analysts believe is required to rebalance markets), intervention SMP stock shifting more readily, and international commodity price indices on the up, it looks like we may have seen the last of the (base) milk price cuts for 2018.

Source: USDEC

EU dairy commodity prices as reported by the EU MMO have continued to firm.  Butter prices have gone up by over €1000/t since January, while SMP has lifted €120/t in the last month (see graph based on EU MMO reports below).

SMP stocks moving at last

SMP prices seem set to recover – though slowly – as intervention stocks are starting to move in earnest at long last.

In the most recent tender, which closed 15th May and was adjudicated yesterday, the EU Commission received bids for 124,360t, with prices offered ranging from €500/t to €1277/t.  The minimum price selected by the EU Commission for adjudication was €1155 – €100 above the April tender – which resulted in 41,598t of SMP being sold between the €1155 and the top price bid.  In fact, the bids exceeded the amount of product available by around 5,000t (there was insufficient stock of the right age in certain countries relative to the bids within the eligible price range).

This means that, since December 2016, over 76,000t of SMP has been sold out of intervention – of which around 65,000t in the last 2 tenders alone.

The EU Commission is expected to increase the quantities available for the June 19th tender to around 149,000t.  It will do so by bringing forward the eligibility date for the stock from product purchased before 1st May 2016 to before 1st June 2016.

Buyers are clearly engaging more with the scheme, and willing to pay more as the fresh market picks up.  This is very positive and holds the prospect that a substantial volume of SMP in intervention could be disposed of before year end.

In recent weeks, traders had been pointing out that the EU intervention stock had become largely irrelevant to the fresh market – and this was showing as SMP prices started firming slowly.

There’s a long way to go, though.  With EU average prices (13th May) averaging at €1440 and latest spot quotes (16th May) at €1490, only this week’s GDT price at US$ 2047 (€1734) exceeds the intervention reference price.

Returns inching up

The returns for the Irish product mix, based on EU MMO reported average EU prices, have lifted half a cent per litre in the last week alone.  This is largely driven by increases in butter, SMP and whey powder prices.

Based on EU MMO Data

An analysis of the most recent EU average returns, EU average spots from Germany, the Netherlands and France and the latest GDT auction earlier this week, show that these commodity prices would justify stronger milk prices than what is currently being paid by most co-ops (even allowing for the much-appreciated support top ups paid by most).

]The April Ornua PPI, unchanged from March at 100.4 points (equivalent to 29.6c/l incl VAT), shows that returns available to Irish co-ops have at least bottomed out.  Many contracts will have been signed forward some weeks/months ago at prices lower than the current spots or market averages.

We would reasonably expect to see some PPI improvements in the months ahead, reflecting fresh contracts being signed at higher prices.

The PPI provided its hedging effect last autumn/winter, when it returned more than average EU prices, and this lag effect is operating the other way – at least for the moment.

Source: Ornua

 

 

Source: IFA

Dairy Markets Down Wednesday in Chicago

At the Chicago Mercantile Exchange, dairy markets were down Wednesday.  Class Three May milk was unchanged at $15.24 a hundredweight. June was down $.09 to $15.75. July was down $.01 to $16.45.  August was down $.03 to $16.80. The milk futures from September through next April ranged from zero to eleven cents lower.

Grade AA Butter was down $.0650 at $2.3850 per pound.  Seven carloads sold from $2.3850 to $2.40. Barrels were down $.0150 at $1.55 per pound.  Seven carloads of barrels sold at $1.54 and $1.55. 40-pound blocks were down $.0025 to  $1.6375 per pound. Eight carloads sold from $1.58 to $1.63. Nonfat dry milk was down $.0150 to $.84 per pound. Five carloads sold from $.8350 to $.8450. Dry whey was down $.0125 to $.36 cents per pound.  One carload sold at that price.

Dairy Situation and Outlook May 2018

The outlook for milk prices continues to improve. May is experiencing increases in dairy product prices. If these dairy product prices can hold, average May prices compared to April on the CME could average about 4 cents per pound higher for butter, about 14 cents for cheddar barrels, 4 cents for 40-pound cheddar blocks, 8 cents for nonfat dry milk, and 3 cents dry whey. As a result the May Class III price would be near $15.25 compared to $14.47 in April the low of $13.40 back in February. The May Class IV price would be near $14.45 compared to $13.48 in April and the low of $12.87 back in February.

Good domestic sales and dairy exports have improved the dairy stock situation and adding strength to the dairy product prices. Compared to a year earlier March 31st stocks of butter was just 0.4% higher with American cheese slightly lower at 0.4%, but other than American cheese stocks were 14.2% higher bringing total cheese stocks 5.2% higher. The strength in nonfat dry milk prices is surprising since stocks were still 20.9% higher than a year ago. Dry whey stocks which have been relatively high were 3.5% lower than a year ago.

The price of butter, cheese, nonfat dry milk and dry whey remain lower than and competitive with world market prices. U.S. dairy exports set a record high in March on a total volume basis surpassing the previous record high set in March 2014. Compared to March a year ago butterfat exports were 180% higher, cheese 9% higher, nonfat dry milk/skim milk powder 38% higher and dry whey 19% higher. March exports as a percent of milk production on a total solids basis was 17.3% compared to 14.1% a year ago. The outlook for dairy exports appears positive for the immediate months ahead.

Milk prices will continue to strengthen and possibility topping out in October or November. The degree of strength will continue to depend upon the level of milk production and dairy exports. The summer weather, quality of forages harvested and the condition of the corn and soybean crop that will impact feed costs will have a bearing on milk production this summer, fall and into winter.

USDA’s report for April milk production was positive for milk prices. Compared to April a year ago milk production was just 0.6% higher. Milk cow numbers declined slightly, down 2,000 head from March, the second consecutive monthly decline. April milk cow numbers were just 8,000 head or 0.1% higher than a year ago. The April increase in milk per cow continues to increase much less than the normal trend being just 0.5% higher.

April milk production was lower than a year ago in major dairy states. Decreases were: New York -2.4%, Pennsylvania -1.7%, Michigan -1.4%, Minnesota -2.2% and Wisconsin -0.6%. There was relatively small increases in California +0.4%, Arizona +1.1%, Iowa +1.6% and South Dakota +1.8%. Relatively strong increases occurred in Idaho +3.5%, Texas +7.0%, Colorado +9.9%, Kansas +5.1% and Utah +5.5%.

It now looks like the Class III price could reach near $16 in June and the mid to high $16’s by July and for the remainder of the year. The average for the year could end up near $15.60 compared to $16.17 last year. The Class IV price could be in the low $15’s in June and then in the mid to high $15’s the remainder of the year even reaching $16 by October averaging near $14.70 compared to $15.16 last year. Dairy margins (returns over feed cost) will improve but the improvement is now being dampen some by higher feed prices.

 

Dairy markets mixed Tuesday in Chicago

At the Chicago Mercantile Exchange, dairy markets were mixed Tuesday. Class Three May milk was up $.02 at $15.24 a hundredweight. June was down $.06 to $15.84. July was up $.01 to $16.46.  August was up $.03 to $16.83. The milk futures from September through next April ranged from two cents lower to six cents higher.

Grade AA Butter was up $.0150 at $2.45 per pound.  Six carloads sold at that price.  Barrels were down $.0050 at $1.5650 per pound.  Two carloads of barrels sold at $1.5650 and $1.5675. 40-pound blocks were down $.0025 to  $1.6375 per pound. No sales were recorded. Nonfat dry milk was unchanged at $.8550 per pound. Six carloads sold from $.8525 to $.8575. Dry whey was up $.0025 to $.3725 cents per pound.  No sales were recorded.

Rabobank: Shortage pushing butter prices towards record highs

Butter prices are spiking higher as a global shortage becomes acute and record highs are expected over the winter months.

In a note after this week’s GlobalDairyTrade auction, ASB senior rural economist Nathan Penny said butter prices had spiked by about 30% so far this year and were only 4% below the record levels of September last year.

The final GDT event for the 2017-18 production season saw overall dairy prices lift 1.9%.

Anhydrous milk fat prices jumped 5.8% and butter prices rose 2.4%.

Rabobank dairy analyst Emma Higgins said Europe was short on fats with a delay in spring production so low volume was helpful for Oceania price support.

It was moving into the quieter months for New Zealand production and therefore fresh product for the auction platform.

Any major price movements would be influenced by the urgency of buyers looking to obtain product prior to the new season, Ms Higgins said.

Mr Penny said there was clear potential for the bank’s milk price forecasts to move higher.

While the sharp drop in the NZ dollar could reverse, the bank was more confident that butter prices would rise further and potentially take other key dairy prices like whole milk powder with it.

Fonterra was due to announce its opening 2018-19 milk price forecast next week and ASB expected it to front foot the new season with a healthy forecast of $6.50 or better.

With the 2017-18 season coming to a close at the end of May, Westpac senior economist Anne Boniface said Fonterra’s $6.55 forecast for that season was unlikely to change signifcantly in the final wash-up. A feature of the season had been the remarkable stability in dairy prices.

 

Source: The Country

Dairy markets mostly higher in Chicago Monday

At the Chicago Mercantile Exchange, the dairy markets were mostly higher Monday.  Class Three May milk was down $.01 at $15.22 a hundredweight. June was up $.24 to $15.90. July was up $.20 to $16.45.  August was up $.19 to $16.80. The milk futures from September through next April ranged from one to fourteen cents higher.

Grade AA Butter was up $.05 at $2.4350 per pound.  Seven carloads sold from $2.4250 to $2.4350. Barrels were up $.0375 at $1.57 per pound.  Twenty carloads of barrels sold with prices from $1.5425 to $1.5575. Forty-pound blocks were up $.0575 to  $1.64 per pound. No sales were recorded. Nonfat dry milk was up $0025 at $.8550 per pound.  No sales were recorded. Dry whey was unchanged at $.37 cents per pound.  No sales were recorded.

Dairy Markets Lower Thursday in Chicago

At the Chicago Mercantile Exchange, dairy markets were mostly lower Thursday. Class Three May milk was down $.02 at $15.23 a hundredweight. June was down $.25 to $15.77. July was down $.15 to $16.17.  August was down $.12 to $16.54. The milk futures from September through next April ranged from eight to fifteen cents lower.

Grade AA Butter was up $.0050 at $2.3850 per pound.  Seventeen carloads sold from $2.38 to $2.39. Barrels were down $.0450 at $1.5350 per pound.  Fourteen carloads of barrels sold with prices from $1.5350 to $1.58.  40-pound blocks were down $.0175 to  $1.5825 per pound. Two carloads sold from $1.5825 to $1.5850. Nonfat dry milk was up $0075 at $.8550 per pound.  Eleven carloads sold from $.8475 to $.86. Dry whey was up $.0275 to $.3675 cents per pound.  Three carloads sold from $.3475 to $.3650.

Dairy Prices Jump to Eight-month High, but Whole Milk Powder Lags

Global dairy prices rose to a nine-month high at a fortnightly auction held early on Wednesday but prices for the key product, whole milk powder, were largely flat.

The Global Dairy Trade (GDT) Price Index climbed 1.9 percent to an average selling price of $3,637 per tonne in the auction held in the early hours of the morning.

That suggested a 1.1 percent drop at the previous sale was a temporary dip and the gradual recovery in prices was back on track.

Gains were led by anhydrous milk fat, which rose 5.8 percent, while skim milk powder jumped 3 percent.

“Skim milk powder (SMP) was also stronger than expected,” said Amy Castleton, dairy analyst at AgriHQ. “SMP likely found some support from less product being available.”

However, whole milk powder, the most-traded item, was only up a touch at 0.2 percent.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product.

But the tepid result for whole milk powder, the country’s main goods export, and a rally in the U.S. dollar meant investors largely ignored the auction and the currency dropped to a six-month low of $0.6862.

A total of 18,161 tonnes was sold at the latest auction, falling 6.9 percent from the previous one, the auction platform said.

GDT Events, which runs the auction, is owned by New Zealand’s Fonterra Co-operative Group Ltd , but operates independently from the dairy giant.

U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.

A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.

The next auction is scheduled for June 5.

 

Source: Reuters

Dairy markets were lower Wednesday in Chicago

At the Chicago Mercantile Exchange, dairy markets were lower Wednesday.  Class Three May milk was unchanged at $15.25 a hundredweight. June was down $.10 to $16.02. July was down  $.04 to $16.32. August was down $.03 to $16.66. The milk futures from September through next April ranged from zero to thirteen cents higher.

Grade AA Butter was down $.0025 at $2.38 per pound.  No sales were recorded. Barrels were down $.02 at $1.58 per pound.  Nine carloads of barrels sold with prices from $1.58 to $1.60.  40-pound blocks were down $.04 to  $1.60 per pound. Four carloads sold from $1.59 to $1.6150. Nonfat dry milk was unchanged at $.8475 per pound.  No sales were recorded. Dry whey was up $.01 to $.34 cents per pound.  No sales were recorded.

Milk Futures Closed Higher in Chicago Tuesday

At the Chicago Mercantile Exchange, Class III milk futures closed higher Tuesday supported by strong international markets and export demand. May milk closed a penny higher at $15.25.  June milk was up $0.03 at $16.10. July milk up $0.09 at $16.36.  August closed a dime higher at $16.69.  September through next April contracts closed six to 15 cents higher.

Grade AA Butter closed up $0.0425 at $2.3825. Twenty-four loads sold ranging from $2.3725 to $2.3825. Barrels were unchanged at $1.60. 40 pound blocks were unchanged at $1.64. Nonfat dry milk closed unchanged at $0.8475. Three trades were made, two at $0.8450 and one at $0.8475. Dry whey was unchanged at $0.33.

CWT Assists with 1.4 Million Pounds of Cheese and Butter Export Sales

Cooperatives Working Together (CWT) has accepted 13 requests for export assistance from cooperatives that have contracts to sell 1.07 million pounds (483 metric tons) of Cheddar and Monterey Jack cheeses, and 330,693 pounds (150 metric tons) of butter to customers in Asia and Europe. The product has been contracted for delivery in the period from May-October 2018.

Total CWT-assisted export sales for 2018 are 34.07 million pounds of American-type cheeses, 10.15 million pounds of butter (82% milkfat) and 923,737 pounds of whole milk powder to 25 countries on five continents. These sales are the equivalent of 549.60 million pounds of milk on a milkfat basis.

This activity reflects CWT beginning the process of implementing the strategic plan approved by the CWT Committee in March. The changes will enhance the effectiveness of the program and facilitate member export opportunities.

Assisting CWT members through the Export Assistance program in the long term helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

 

Milk futures higher cash markets mixed

At the Chicago Mercantile Exchange, Milk futures were higher and the cash dairy markets were mixed Monday. Class Three May milk was up $.01 at $15.24 a hundredweight. June was up $.23 to $16.09. July was up $.21 to $16.27.  August was up $.21 to $16.59. The milk futures from September through next April ranged from nine to nineteen cents higher.

Grade AA Butter was up $.0050 at $2.34 per pound.  Seventeen carloads sold from $2.3375 to $2.3425. Barrels were down $.02 at $1.60 per pound.  Nine carloads of barrels sold at that price. Forty-pound blocks were up $.0075 to  $1.64 per pound. One carload sold at that price. Nonfat dry milk was down $.0025 at $.8475 per pound.  No sales were recorded. Dry whey was up $.0050 to $.33 cents per pound.  One carload sold at that price.

NZ farmers eye third straight year of strong dairy prices

New Zealand dairy farmers look set to enjoy what may become the third year in a row of $6-plus milk prices in the coming season, economists say.

Fonterra has a milk price forecast of $6.55/kg of milksolids for the season, which ends on May 30.

That’s up from $6.12/kg in 2016/17.

Another strong milk price will allow farmers to further repair damage to their balance sheets incurred when it dropped to $4.40/kg in 2014/15 and $3.90/kg in 2015/16, down from a record high of $8.40/kg in 2013/14.

Fonterra is expected to issue its opening forecast for the coming 2018/19 season later this month.

All the major bank economists expect to see a $6-plus milk price, and some expect to see a small upward revision to the current forecast for 2017/18, thanks in part to recent weakness in the NZ dollar.

Rural lending specialist Rabobank said the season could get off to a “shaky” start but that it expected a strong finish, ending with a milk price of $6.40/kg.

The bank’s dairy analyst Emma Higgins said the 2018/19 season should be profitable for most New Zealand dairy farmers, despite greater uncertainty surrounding their operating environment.

One of the global risks looming in the near term is the peak period of milk production in the northern hemisphere, she said.

“The northern hemisphere flush will be an influential pressure point for commodity prices at the start of the 2018/19 season and we anticipate that supply will outstrip global demand in the coming months,” Higgins said.

“However, as the second half of the 2018/19 season develops, Rabobank anticipates commodity prices will improve as production growth from key exporting regions decreases and a robust import programme by Chinese buyers supports commodity prices across this period,” she said in a report.

ANZ rural economist Con Williams said conditions for farm-gate returns in the dairy sector remained favourable.

“Broadly, we see global milk supply growing at, or slightly below, trend with a number of country-specific limitations and the marginal cost of production lifting,” he said.

“With whole milk powder is holding in a broad US$2800 to US$3300/tonne range, New Zealand skim milk powder continuing to attract a premium versus other suppliers, and milkfat prices set to follow a similar pattern to 2017/18, this gives a farm gate milk price range of mid-to-high $6/kg,” he said.

Source: NZ Herald

Fonterra sets fixed milk price and Saputo announces price rise

Fonterra Australia set its Fixed Base Milk Price for the 2018-19 season as $5.90 per kilogram of milk solids on Friday, the same day Saputo announced a farmgate price increase for all its 2017-18 suppliers.

Dairy farmers who supply Fonterra can lock in up to 70 per cent of their season’s milk at a fixed rice under the scheme, Fonterra Farm Source general manager Matt Watt said.

“Certainty can be particularly important for farmers at times when they are considering business investments such as expansion or undertaking a new conversion,” Mr Watt said.

Fonterra used a tender allocation process to determine volumes and prices for milk solids.

Saputo’s increased payments of five cents per kilogram for butterfat and 11 cents for protein brings the average farmgate price to $5.68 per kilogram of milk solids.

This price is up from $5.60 per kilogram of milk solids, a Saputo spokesman said.

“We are focused on building milk supply in Victoria and Tasmania as a priority,” he said.

 

Source: The Advocate

New dairy season to “hit a six” in New Zealand

New dairy season to “hit a six” – with shaky start possible for but strong finish anticipated

The 2018/19 dairy season is expected to “hit a six”, with a shaky start possible, but a strong finish anticipated, resulting in a third season with a “milk price starting with a six”, according to a new industry report.

In its recently-released dairy seasonal update A hit for six in 2018/19 – New Zealand dairy farmers face a triple treat, agribusiness banking specialist Rabobank says New Zealand dairy farmers have enjoyed a period of profitability with milk prices above breakeven – and the upcoming season will see this run continue.

Rabobank forecasts a farmgate milk price of NZD 6.40/kgMS for the 2018/19 season.

Report author, dairy analyst Emma Higgins, says the 2018/19 season should be profitable for most New Zealand dairy farmers, despite greater uncertainty surrounding the operating environment than would usually be the case.

 

Source: Scoop

Markets Mostly Mixed in Chicago Thursday

At the Chicago Mercantile Exchange, the dairy markets were mostly down Thursday. Class Three May milk was down $.03 at $15.24 a hundredweight. June was down $.20 to $15.83. July was down $.20 to $16.06.  August was down $.24 to $16.40. The milk futures from September through next April ranged from three to eighteen cents lower.

Grade AA Butter was down $.0050 at $2.34 per pound.  Three carloads sold at $2.34 and $2.3450. Barrels were unchanged at $1.65 per pound.  Five carloads sold at that price. 40-pound blocks were down $.0375 to  $1.6650 per pound. One carload sold at $1.6675. Nonfat dry milk was up $.02 at $.85 per pound.  Twenty carloads sold with prices between $.82 and $.85. Dry whey was up $.0025 to $.3225 cents per pound.  No sales were recorded.

Milk Futures and Cheese Steady in Chicago Wednesday

At the Chicago Mercantile Exchange, Wednesday,  Class III milk futures were firm to higher, with traders squaring up positions ahead of Thursday’s USDA supply and demand numbers. May was up $.02 at $15.27, June jumped $.17 to $16.03, July gained $.08 at $16.26, and August was $.12 higher at $16.64.

Cash cheese blocks were unchanged at $1.7025, with the last uncovered offer for one load at $1.725, and barrels held at $1.65, with the last uncovered offer for one load at $1.655. Nonfat dry milk was $.03 lower at $83. Three loads were sold, including one at $.83. The last unfilled bid was on one load at $.825, while the last uncovered offer was for one load at $.8325. Butter was $.0425 higher at $2.345. A total of 12 loads were sold, including two at the closing price. The last unfilled bid was on one load at $2.3425 and the last uncovered offer was for one load at $2.355. Dry whey was steady at $.32. The last unfilled bid was on one load at $.32 and the last uncovered offer was for one load at $.33.

Dairy Markets Mixed in Chicago Tuesday

At the Chicago Mercantile Exchange dairy markets were mixed Tuesday. Class Three May milk was down $.03 at $15.25 a hundredweight. June was up $.09 to $15.86. July was up $.04 to $16.18.  August was up $.06 to $16.52. The milk futures from September through next April ranged from one to five cents higher.

Grade AA Butter was down $.0225 at $2.3025 per pound.  Twenty carloads sold with prices ranging from $2.3025 to $2.3250. Barrels were down $.0025 to $1.65 per pound.  Sixteen carloads sold at $1.65 and $1.6525. 40-pound blocks were up $.01 to  $1.7025 per pound. Two carloads sold at $1.6875 and $1.6950. Nonfat dry milk was unchanged at $.86 per pound.  No sales were recorded. Dry whey was unchanged at $.32 cents per pound.  No sales were recorded.

Dairy Markets Mostly Up in Chicago

At the Chicago Mercantile Exchange, dairy markets were mostly up Monday. Class Three May milk was up $.17 at $15.28 a hundredweight. June was up $.21 to $15.77. July was up $.16 to $16.14.  August was up $.14 to $16.46. The milk futures from September through next April ranged from zero to fourteen cents higher.

Grade AA Butter was down $.0275 at $2.3250 per pound.  No sales were recorded. Barrels were up $.0525 to $1.6525 per pound.  Three carloads sold at $1.60 and $1.6525.  40-pound blocks were up $.0275 to  $1.6925 per pound. One carload sold at $1.70. Nonfat dry milk was up $.0175 to $.86 per pound.  Six carloads sold with prices from $.8575 to $.8625. Dry whey was up $.0025 to $.33 cents per pound.  One carload sold at that price.

Markets Mixed in Chicago Thursday

At the Chicago Mercantile Exchange, butter and nonfat dry milk were up, but most other dairy markets were down Thursday.

Class Three May milk was down $.11 at $15.12 a hundredweight. June was down $.09 to $15.59. July was down $.10 to $15.96.  August was down $.08 to $16.30. The milk futures from September through next April ranged from four to nine cents lower.

Grade AA Butter was up $.0050 at $2.3525 per pound.  Twenty-four carloads sold with prices from $2.3425 to $2.3550. Barrels were unchanged at $1.6025 per pound.  No sales were recorded.  40-pound blocks were unchanged at  $1.6650 per pound. No sales were recorded. Nonfat dry milk was up $.0175 to $.8375 per pound.  Three carloads sold with prices from $.8350 to $.84. Dry whey was up $.0025 to $.3175 cents per pound.  No sales were recorded.

Dairy Margin Watch: April

Dairy margins improved slightly over the last half of April as increased milk prices more than offset the impact of rising feed costs. While margins are still only about average from a historical perspective, with the exception of spot Q2, they are projected positive into early 2019. Milk prices are drawing support from a delayed spring flush following unseasonably cold weather in the Upper Midwest while a recent surge in NDM prices has lifted Class IV Milk futures on the CME. USDA reported March Milk Production at 18.987 billion pounds, up 1.3% from last year, with the milking herd estimated at 9.406 million head, down 2,000 from February but 23,000 higher than March, 2017. Production per cow averaged 1,954 lbs. in March, up 1.1% from last year. Meanwhile, USDA Cold Storage data reflected more modest builds in dairy inventories than would seasonally be expected. Butter stocks in cold storage at the end of March totaled 273.6 million pounds, up 2.9% from February and 0.4% higher than last year. The February to March build in supply slightly trailed the 3.8% average based on the past ten years. Total cheese in cold storage on March 31 was 1.328 billion pounds, up 0.8% from February compared to the average build of 1.6% between February and March over the past ten years. Total cheese stocks were also up 5.2% from March, 2017. Feed costs have continued to advance on strong demand amidst ongoing planting delays. USDA reported corn planting progress for the week ending April 29 at 17% complete compared to 32% last year and 30% on average for the end of April over the past 10 years. Soybean planting progress was reported at 5% complete versus 9% last year and 6% on average for this point in the season. Our clients have been mainly focused on strategic adjustments to existing positions, including allocation of milk hedges between Class III and Class IV, and adding flexibility to feed hedges.
 
 
The Dairy Margin calculation assumes, using a feed price correlation model, that for a typical dairy 62.4 lbs of corn (or equivalent) and 7.34 lbs of meal (or equivalent) are required to produce 100 lbs of milk (includes dry cows, excludes heifers not yet fresh). Additional assumed costs include $0.90/cwt for other, non-correlating feeds, $2.65/cwt for corn and meal basis, and $8.00/cwt for non-feed expenses. Milk basis is $0.75/cwt and non-milk revenue is $1.00/cwt.
Source:  CIH
 

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