Archive for Dairy Markets

Milk Futures Gain Slightly in Chicago Wednesday

On the Chicago Mercantile Exchange, milk futures were slightly higher Wednesday while cash markets were mixed following the cold storage report.  Milk prices for Class III did end up higher on the day as futures rose 9-19 cents/cwt in fourth quarter 2020.  First half 2021 ranged from three cents higher to five lower. First half 2021 is now offering dairies a price of $16.50/cwt.  Class IV took it on the chin as months declined 15-23 cents in Q4 but was also down double digits in first half 2021.  

CME spot dairy product trade saw dry whey up $0.0150 at $0.3850.  Two trades were made at $0.3775 and $0.3850.  Blocks down $0.06 at $2.54.  One trade was made at that price.  Barrels down $0.0050 at $1.63.  Butter down $0.10 at $1.52.  Six trades were made at $1.52 to $1.5375. Nonfat dry milk up $0.0125 at $1.0850.  Two trades were made at $1.0750 and $1.0850.

Grain prices suffered losses across the board as farmer selling and profit taking out of managed money took place.  Corn softened a penny and sits at $3.685/bu.  Soybeans slid five cents to $10.145/bu while soybean meal added $4/ton.  The wheat complex dropped 6-9 cents as well.

Milk Market Swing Lower Midweek in Chicago

On the Chicago Mercantile Exchange milk futures took a strong swing to the lower side Wednesday as cheese markets descended, and traders took back overbought positions. Class III milk futures traded significantly lower today.  October milk fared the worst, falling $1.24 to $18.41/cwt.  November settled 86 cents lower to $18.12/cwt.  December suffered a 46 cent loss to $17.21/cwt.  First half 2021 average is $16.51/cwt.  Class IV milk prices declined 5-14 cents.

In the CME Cash Dairy Product Trade, dry whey up $0.0075 at $0.37.  Two trades were made at $0.3675 and $0.37.  Blocks down $0.0475 at $2.60.  Two trades were made at $2.60 and $2.6475.  Barrels unchanged at $1.6350.  Butter up $0.0075 at $1.62.  One trade was made at that price.  Nonfat dry milk down $0.0075 at $1.0725.  One trade was made at that price. 

December corn lost half a penny to $3.6925/bushel.  November soybeans decreased 2.75 cents to $10.1975/bushel.  October soybean meal increased $3.90 to $337.30/ton.

Milk Markets Start Week Higher In Chicago

On the Chicago Mercantile Exchange milk futures closed mostly higher Monday as optimism from additional COVID relief and food box program buying carries markets.  Class III Milk fell 3 in September to 16.26, but October gained 6 to 19.65, November gained 28 to 18.98. 2021 was unchanged to 3 higher.  Class IV milk saw some nice movement and finished higher across the board. September gained 3 to 12.75, October gained 27 to 14.20, and Nov gained 31 cents to 14.67. 2021 was 1-15 cents higher. 

On the product trade Dry whey up $0.0075 at $0.3625.  One trade was made at $0.3575.  Blocks up $0.02 at $2.6475.  Barrels unchanged at $1.6350.  Butter up $0.0150 at $1.6125.  Nonfat dry milk up $0.01 at $1.08.  Three trades were made at $1.0750 to $1.08.

The grain and feed complex was lower. Corn fell 8 ¾ cents to 3.69 ¾, Soybeans fell 21 cents to 10.22 ½, Chicago wheat fell 20 ¼ to 5.54 ¾, and Soybean meal gave back $4 to $333.40/ton.

Milk Markets Close Mostly Higher in Chicago Thursday

On the Chicago Mercantile Exchange milk futures closed mostly higher Thursday aligning with the direction of cash trade and boosted by additional food box program purchases. September Class III milk down five cents at $16.25.  October 15 cents higher at $19.04.  November up 35 cents at $17.95.  December 31 cents higher at $16.99.  January through March contracts five to 22 cents higher.

Moving along to the CME Cash Dairy Product Trade, dry whey up $0.0150 at $0.3550.  Three sales were made at $0.3450 and $0.3525.   Blocks up $0.0725 at $2.40.  One trade was made at that price.  Barrels up $0.0250 at $1.6350.  Four trades were made ranging from $1.63 to $1.64. Butter up $0.02 at $1.53.  Four trades were made ranging from $1.52 to $1.53. Nonfat dry milk down $0.0075 at $1.06.  Four trades were made at $1.0575 and $1.06.

The grain complex rallied higher on the day.  December corn settled 3.50 cents higher to $3.7525/bushel, which is the highest close in just over 6 months.  November soybeans continued its tear higher, surging 17.25 cents to $10.2850/bushel.  December Chicago Wheat increased 14.25 cents to $5.5625.  

Latest Global Dairy Trade Show Consistent Milk Price

Latest global dairy auction results give cause for cautious optimism about the milk price for farmers in the current season, Westpac senior agri economist Nathan Penny says.

Penny is forecasting a price of $6.50 per kilogram of milk solids for the 2020/21 season currently under way.

And he said the results in the latest GlobalDairyTrade auction early on Wednesday morning are “consistent” with Westpac’s $6.50/ kg milk price forecast.

“Note in the short term, we have allowed for prices to fall as New Zealand production rises towards its peak, before prices firm again later in the season,” he says.

Fonterra’s current forecast for the 2020/21 season is in a wide range of $5.90-$6.90. The co-operative is set to announce its full-year results on Friday (September 18) at which time it will confirm what the final price is for the season recently concluded. The most recent update Fonterra gave on that was to narrow the range for the 2019/20 price to $7.10-$7.20.

Westpac’s Penny says it’s still early days in the current production season, and the uncertainties around the Covid impact through the full dairy season remain large.

“On this basis, we recommend that farmers approach the season with ‘eyes wide open’ and continue to closely follow dairy market developments,” he says.  

Commenting on the latest auction results, Penny said the result reversed some of the “cumulative fall” over the August and the first September auction. He noted that Whole Milk Powder (WMP) prices now sit 8.5% below their recent peak in July, while overall prices are around 4% below.

“Looking back to the pre-Covid levels, WMP and overall prices are 6.8% and 10.4% lower, respectively.”

He said a pattern of price falls followed by prices rises “is in line with what we have been expecting”.

“Covid outbreaks over August and early September put pressure on market confidence and in turn on prices. But as Covid case numbers settle again, confidence has returned to dairy markets, and prices have stabilised once again.

“From here, we expect this pattern to continue. By and large most key dairy markets (notably China) continue to manage Covid well, but outbreaks are likely to occur from time to time. On the flipside, if the virus surges in key markets, then prices are likely to fall below recent ranges.”

See here for the full dairy industry payout history and for economists’ forecasts.

Milk Futures Close Lower as Cash Trades are Higher in Chicago Wednesday

On the Chicago Mercantile Exchange milk futures closed mostly lower Wednesday and cash trades were mostly higher. Class III Milk fell 3 in Sept to 16.30, but gained 22 in October back to 18.89, and November gained 24 cents to 17.60. 2021 was 1-14 cents higher. Class IV milk also jumped – September gained 1 to 12..65, Oct gained 16 to 13.67 and November gained 15 to 14.23/cwt. 2021 moved even to 11 cents higher

The CME spot Trade had dry whey down $0.0075 at $0.34.  Two sales were made at that price.   Blocks up $0.1125 at $2.3275.  One trade was made at that price.  Barrels up $0.01 at $1.61.  Two trades were made at $1.60 and $1.61.  Butter up $0.0050 at $1.51. Nonfat dry milk up $0.0075 at $1.0675 One trade was made at that price. 

Grain markets jumped higher – Soybeans continue to lead the march – gaining 19 ¾ cents to $10.11 ¼, Corn gained 5 ¾ cents to 3.71 ¾, and soybean meal gained $6.50 to 320.80/ton.

Global Dairy Trade Sees First Positive Trading Event Since July

Global Dairy Trade Event 268 concluded with the GDT Price Index up 3.6%, its first positive trading event since the beginning of July. Losses in lactose, -2.7%, and butter, -1.4%, were offset by gains in skim milk powder, +8.4%, cheddar, +7.2%, whole milk powder, +3.2%, and anhydrous milk fat, +2.0%.  Click here to see more

Milk Futures Move Lower While Spot Trade Close Higher

On the Chicago Mercantile Exchange, milk futures closed lower Tuesday while global markets and cash trades were higher.  Class III milk futures tumbled lower.  September milk lost 8 cents to $16.33/lb.  October milk descended 53 cents to $18.70/cwt.  November fell 28 cents to $17.37.  December finished 22 cents lower to $16.50/cwt.   Class IV futures were mixed.  September lost 5 cents to $12.63/cwt.  October was up 2 cents to $13.51.  November added 15 to $14.08/cwt.  

On spot market dry whey unchanged at $0.3475.  Blocks unchanged at $2.2150.  Barrels unchanged at $1.60.  Butter up $0.0150 at $1.5050.  Forty-seven trades were made ranging from $1.4925 to $1.5125.  Nonfat dry milk up $0.02 at $1.06.  Nine trades were made ranging from $1.05 to $1.06.

The grain complex finished the day lower.  December corn declined 3.50 cents to $3.66/bushel.  November soybeans drifted 8 cents lower to $9.9150/bushel.  October soybean meal fell $2.70 to $314.30/ton.  December Chicago Wheat settled 7.50 cents lower to $5.3825/bushel.  October live cattle gained 22 cents to $107.10/cwt.  October feeders increased $1.10 to $143.70/cwt.  October crude oil improved $1.06 to $38.32/barrel.    

Mixed Activity in Chicago to Start the Week

On the Chicago Mercantile Exchange  Milk futures and cash trade started the week with mixed activity.  Class III milk started the day strong and was up early in the day but failed to hold on as sellers showed up to the party. September fell 7 cents to 16.71, October gained 2 to 19.23, and November fell 4 cents to 17.65/cwt.  Class IV was mostly unchanged. September held at 12.68, October fell 1 to 13.49, and November fell 2 cents to 13.93/cwt. 

The CME spot trade had Blocks up $0.05 at $2.2150.  Six trades were made ranging from $2.20 to $2.2050. Barrels up $0.0050 at $1.60.  Four trades were made ranging from $1.5875 to $1.60.  Butter up $0.01 at $1.49.  Seven trades were made ranging from $1.49 to $1.50.  Nonfat dry milk unchanged at $1.04. Dry whey down $0.0075 at $0.3475.  

The grain and feed markets was quieter – Soybeans touched over 10.00 in November to retreat back to $9.99 ½, December corn gained a penny to 3.69 ½, and Soybean meal fell $2.20 to 316.20/ton.

Negative Producer Price Differentials in Milk Pricing Going Down

A University of Wisconsin-Madison economist says those negative Producer Price Differentials that have been pulling down the prices farmers are paid for their Class III milk may finally be under control. Dr. Mark Stephenson, who serves as the director of the Wisconsin Center for Dairy Profitability, said on Tuesday’s episode of the Dairy Signal that the negative PPDs will be around 40-cents in the next month. That’s opposed to the $3 to $4 levels seen during the past summer.

“We should see less negative PPDs going into the fall,” Dr. Stephenson told viewers of the Professional Dairy Producers of Wisconsin’s online forum. “The good news is the negative PPDs should be in the rearview mirror as we enter into 2021; but the bad news is we’re seeing this happen because the Class III milk price will be lower. In the long-run, it could mean that milk checks will be similar to what they are now.”

Stephenson’s presentation went into detail on how the PPDs are determined based on the spread of the various milk class prices in a given month. In summary, he said when milk is pooled, the PPD becomes negative during scenarios where the Class III price rises too fast (as it did in June and July of 2020) or when the spread between Classes I, III and IV prices gets wider.

However, he points out that there’s no rule book for price forecasting during a year that has seen a pandemic, a controversial presidential election and swinging markets.

“Volatility is going to be the name of the game,” he said. “Although we are seeing lower prices, I’m hopeful that the outcome won’t drag on for years to come like it did after the recession of 2008 and 2009.

And he adds that one of the greatest lessons learned in 2020 is that risk management is important.

“Last December, most producers saw 2020 as the year where everything was going to be better. As a result, not as many took advantage of tools like the Dairy Margin Protection program… which would have been cheap insurance coverage.”

Dr. Stephenson said fortunately, a lot of farmers are going to have more high-quality feed available going into the winter, which will help reduce input costs.

Source: Wisconsin Ag Connection 

Milk Futures Mixed Thursday in Chicago

On the Chicago Mercantile Exchange, milk futures were mixed Thursday while cash trade was mostly lower.  Class III milk futures printed both red and green today.  September declined 16 cents to $16.46/cwt.  October pushed 25 cents higher to $18.73/cwt.  November rose 2 cents to $17.27/cwt.  December milk lost 3 to $16.45/cwt.  First half 2021 resides at $16.29/cwt.   Class IV milk was also mixed.  October gained 3 cents to $13.67.  November milk decreased 18 to $14.07.  December milk dropped 17 to $14.37/cwt.  

Blocks and barrels both turned lower today with the spread widening to 52 cents in the CME Cash Dairy Product Trade. Blocks down $0.0075 at $2.15.  Two trades were made $2.15 to $2.1575. Barrels down $0.0450 at $1.63.  Two trades were made at $1.63 to $1.6775. Dry whey up $0.0075 at $0.3450.  One trade was made at that price. Butter down $0.0175 at $1.4825.  Sixteen trades were made ranging from $1.48 to $1.50.  Nonfat dry milk down $0.0025 at $1.04.  Two trades were made at $1.04 and $1.0425. 

The grain complex was mixed ahead of tomorrow’s USDA supply and demand report.  December corn surged 4.75 cents to $3.65/bushel.  November soybeans bounced off $9.80, finishing at $9.7750/bushel.  October soybean meal lost 20 cents to $312.70/ton.  September Chicago Wheat added 6 cents to $5.40/bushel.  

Milk Futures Continue to Slide in Chicago Wednesday

On the Chicago Mercantile Exchange, milk futures continued to slide Wednesday while cash markets were mixed.  Class III milk saw September slide 23 to 16.62, Oct fell 33 cents to 18.48, and November fell 14 to 17.25. 2021 varied from 3 higher to 7 cents lower.  Class IV milk was unchanged in Sept at 12.83, Oct fell 21 to 13.64, and November fell 2 to 14.25.  2021 was unchanged across the board in quiet trading. 

Cheddar Barrels drove the futures trade today as our other products mostly traded higher. The CME spot trade had Dry whey up $0.0050 at $0.3375.  Two trades were made at $0.3350 and $0.3375. Blocks up $0.0050 at $2.1575.  One trade was made at that price. Barrels down $0.04 at $1.6750.  Butter unchanged at $1.50.  Thirteen trades were made ranging from $1.50 to $1.51.  Nonfat dry milk up $0.0125 at $1.0425.  Three trades were made at $1.04 and $1.0425. 

Soybeans continue their drive higher in the grain complex. November gained 5 ¾ to 9.78 ¾. December corn fell 1 ½ cents to 3.60 ¼, and Soyean meal gained back $3.70 to 310.90/ton. 

Futures Markets Lower while Spot Market is Up in Chicago Tuesday

Another round of higher cheese trade ended with the Class III price faltering on Monday on the Chicago Mercantile Exchange.  Milk futures closed mostly lower Monday while cash markets were quietly higher. Class III milk declined $0.22/cwt in September on Monday to $16.84.  October lost $0.06, November dropped $0.15, and December was down $0.13/cwt.  The fourth quarter 2020 average sits at $17.58/cwt.  2021 prices were a mixed bag closing anywhere from $0.08/cwt lower to $0.02/cwt higher.  Class IV had little trade with results in 2020 mainly unchanged.

In spot trade dry whey unchanged at $0.3325.  One trade was made at that price. Blocks up $0.0275 at $2.1525.  Four trades were made ranging from $2.1450 to $2.1525.  Barrels up $0.0150 at $1.7150.  Three trades were made ranging from $1.7150 to $1.7425. Butter up $0.0075 at $1.50.  Nonfat dry milk unchanged at $1.03. 

Corn and soybean prices were all over the place on Monday.  Corn traded 3.75 cents higher and closed at $3.6175/bu despite trading lower to begin the session.  Soybeans acted similar settling 5 cents higher to $9.73/bu.  This is the highest close since January 14th with the one year high of $9.8275 in its sights.  Soybean meal lost $2.5/ton and the wheat complex fell 3-8 cents/bu

Milk Futures Move Lower in Chicago Thursday

On the Chicago Mercantile Exchange milk futures closed mostly lower Thursday ahead of the monthly dairy product report while cash markets were mixed. September Class III milk up 19 cents at $16.82.  October six cents lower at $18.96.  November 34 cents lower at $17.73.  December down 36 cents at $16.84.  January through March contracts three to 20 cents lower.

Small volumes on the CME spot market drive prices higher.  Dry whey down $0.0025 at $0.3325.  One sale was made at that price. Blocks up $0.1425 at $2.0525.  One trade was made at $2.05. Barrels up $0.0650 at $1.6350.  Two trades were made at that price. Butter down $0.01 at $1.50.  Twenty-two trades were made ranging from $1.50 to $1.53. Nonfat dry milk down $0.0050 at $1.03.  Three trades were made at $1.0275 and $1.03. 

The grain and feed complex was mixed. December corn finishing ¾ cent higher to 3.58 ¾, Chicago wheat fell 5 ¾ cents to 5.58 ¼,  Soybeans gained 7 ¼ to 9.62 even, and soybean meal fell 50 cents to $302.30/ton.

Global Dairy Commodity Update September 2020

While dairy commodity markets remained relatively steady (except for US cheddar), dairy market fundamentals are mixed across major producing regions and local factors continue to influence prices, creating some diverging trends.

Global trade rebounded strongly in June, with healthy rises across most major product categories as buyers took advantage of low prices in April and May. The trade in the month took overall trade for the first half of 2020 to just 0.7% behind the 2019 comparative, despite COVID-19 disruptions.

COVID-19 restrictions will continue to ease but “second wave” surges in infections will cause reversals of reopenings in many regions. This will ensure retail demand remains a stable platform alongside a slow and bumpy recovery in food service channels while business and tourism travel and events will be limited through much of 2021.

Milk production trends are varied. While the EU-27’s growth may slow a little and changing climate may stem Latin America’s surge, output in most other regions is improving – strongest in the US, while weather is still a lottery in NZ.

Domestic demand for cheese and butterfat – sustained by strong grocery sales – may be vulnerable to the impacts of recession on household food spending.  Shoppers will probably trade down to cheaper products, do less entertaining and opt for low-cost eating out or takeout options. This may weaken overall demand and increase price sensitivity – but this hasn’t shown up just yet.

This risk of stock-build in butterfat remains a moderate risk but is dependent on the sustainability of cheese demand in Europe and the prospects for increased exports, while improved US cheese supplies will weaken prices.

Oceania markets are mixed. While WMP fundamentals appear balanced, weak butterfat demand due to the impacts of food service closures is weighing on prices, while the durability of premiums over US and EU SMP will be tested.

Skim Milk Powder  
Global SMP trade jumped 21% YOY in June, 43% of which came from SE Asia. The rolling annual total of SMP trade has recovered to within 2.6% of peak tonnage (achieved last September).

Whole Milk Powder
Global WMP trade rebounded 23% in June (with exports to Nth Africa making up half the gains in the month with the rolling annual total of WMP trade remaining 5.8% behind its peak 6 years earlier.

Cheese
Global cheese trade increased 14.4% YOY in June, with gains in most regions – strongest being UK, China and Mexico. Once the lure of low prices washed through the trade data, weak food service demand and uncertainty about the ongoing effects of COVID-19 will hang over cheese markets in coming months.

Butter
Global butterfat prices continue to converge, with Oceania values weakening further through August. EU butter prices improved, while US values softened through the month. Butterfat trade lifted 13.1% YOY in June in overall terms, this time aided by a 19% jump in butter trade, half of which came from MENA.

Whey
Whey powder prices continue to steady in the EU, while US prices have firmed in August after dipping in July. WPC prices for higher concentrated products remain weak with the lack of demand from the fitness market and weak growth in infant formula trade. The lack of demand for WPCs is pushing more whey solids into commodity powder production, as cheese output improves – especially in the US. Global trade in whey products lifted 8.5% YOY in August with strong trade into China.

Source: maxumfoods.com

Milk Futures Trade Higher in Chicago Wednesday

On the Chicago Mercantile Exchange milk futures closed higher at midweek supported by large moves on the cash market.  Class III milk saw limit lock moves in September and October, gaining 75 cents. September at 16.63, October at 19.02, and November gained 66 cents to 18.07. 2021 moved 2-30 cents higher.  Class iV milk gained 8 cents in 12.98 in September, October gained 7 to 14.04, and November gained 18 to 14.53. 2021 was unchanged to 3 higher in mostly quiet trading.

Small volumes on the CME spot market drive prices higher.  Dry whey unchanged at $0.3350.  Two sales were made at that price. Blocks up $0.1075 at $1.91.  One trade was made at that price. Barrels up $0.1250 at $1.57.  One trade was made at that price. Butter up $0.0450 at $1.51.  One trade was made at that price. Nonfat dry milk up $0.0050 at $1.0350. 

The grain and feed complex was mixed. December corn finishing ¾ cent higher to 3.58 ¾, Chicago wheat fell 5 ¾ cents to 5.58 ¼,  Soybeans gained 7 ¼ to 9.62 even, and soybean meal fell 50 cents to $302.30/ton.

Global Dairy Trade Drives Markets Higher in Chicago Tuesday

On the Chicago Mercantile Exchange milk futures closed higher Tuesday finding strength from the cash market while prices on at the Global Dairy Trade were lower. Class III milk futures traded $0.17 higher in September and $0.36 in October.  November 2020 through the end of 2021 closed in a range of $0.05 higher to $0.05 lower.  Class IV months settled with September down $0.08 while October traded 132 times with its price up $0.10 to $13.97/cwt.  November was also up slightly. 

CME Spot Dairy Auction followed GDT with Blocks up $0.0050 at $1.8025.  Six trades were made ranging from $1.7750 to $1.8025. Barrels up $0.0075 at $1.4450.  Three trades were made ranging from $1.4450 to $1.4575. Butter down $0.0225 at $1.4650.  Nineteen trades were made ranging from $1.4525 to $1.48. Nonfat dry milk up $0.0050 at $1.03.  Two sales were made at $1.0250 and $1.03. Dry whey unchanged at $0.3350. 

The Global Dairy Trade auction index in New Zealand posted another negative sales event. The index dropped one percent to $2,955 per ton.  Gains in butter milk powder, +3.9%, skim milk powder, +1.8%, and lactose, +0.8%, were offset by losses in whole milk powder, -2%, butter, -1.2%, anhydrous milk fat, -0.5%, and cheddar, -0.4%.

Grains saw a lot of volatility in the overnight session but turned in a calm day session of trade.  After USDA released the crop conditions report on Monday afternoon, the market fell $0.07/bu in corn and $0.11 in soybeans on the overnight.  Crop conditions were reported where the trade expected them to be following a big surprise the week prior.  Corn and soybeans battled back and posted stronger settlements to $3.58/bu and $9.55/bu, respectively.  The wheat complex ran $0.06 – $0.115/bu higher as well. 

Amul becomes first Indian dairy company to be in Rabobank’s Global Top 20 list; Nestle leads

Amul, Gujarat Cooperative Milk Marketing Federation (GCMMF), has become the first Indian dairy firm to make a place in the global top 20 list released by Rabobank, a Dutch multinational banking and financial services company. According to the list, Switzerland’s Nestle topped the list with a turnover of US $22.1 billion, followed by France’s Lactalis with US $ 21 billion turnover. Amul has achieved an annual turnover of $5.5 billion. “GCMMF (Amul) enters the Rabobank’s Global Top 20 Dairy Companies list for the first time at No.16,” Amul said in its tweet. It further added that this is a matter of pride for 36 lakh milk producers of Gujarat. 

On this achievement, RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation Limited (Amul), thanked the Gujarat government. “For all this tremendous growth credit also goes to Govt of Gujarat, CM Vijay Rupani for supporting 36 lacs farmers during difficult times by giving timely export incentives and Infrastructure funding,” Sodhi said in a tweet. He also said that this has been achieved due to the efforts of 3.6 million milk producers especially women.

US’ Dairy Farmers of America which was ranked 6th in the 2019 list, has been positioned third this year with a turnover of US $20.1 billion. Among others are France’s Danone at fourth, China’s Yili at fifth, New Zealand’s Fonterra at sixth, Netherlands’ FrieslandCampina at seventh, China’s Mengniu at eighth, Denmark/Sweden’s Arla Foods at ninth and Canada’s Saputo at tenth position.

Earlier this week, speaking at an online dialogue organized by All India Management Association (AIMA), RS Sodhi said that the dairy sector can give a significant boost to the employment generation in the country. This sector would alone create 1.2 crore new jobs over the next 10 years. Sodhi added saying that India produces 21 per cent of the milk in the world and India’s milk market was growing at 5 per cent, compared to the 1.8 per cent growth in the global milk market. 

In the wake of the coronavirus pandemic, Amul has increased its focus on immunity-boosting products and launched Haldi Ice Cream. The company plans to roll out two more products i.e. Immuno Chakra Ice Cream, the Health trinity of Haldi-Ginger-Tulsi in tri-colour Ice Cream stick of 60 ml and Star Anise Doodh in the 200 ml can. In July, Amul launched Panchamrit, a mix of five ingredients which is usually offered in temples as ‘prasad’. It also launched Janmay range of edible oils, to reduce India’s edible oil dependency and help local farmers.

Source: Financial Express

Mixed Results on CME to Start the Week

On the Chicago Mercantile Exchange milk futures closed mixed Monday following mixed cash activity. Class III futures were a mixed bag.  August gained 1 penny to $19.77/cwt.  September added 4 cents to $15.73/cwt.  October climbed 20 cents to $17.84/cwt.  First half 2021 average settled at $16.34/cwt.  September class IV milk increased 8 cents to $13.04/cwt.  Quarter 4 2020 is averaging $14.25/cwt.

Blocks and barrels continue to see steady volume in the CME Cash Dairy Product Trade.  Blocks down $0.03 at $1.7975.  Nine trades were made ranging from $1.7975 to $1.8275. Barrels up $0.0075 at $1.4375.  Seven trades were made ranging from $1.4325 to $1.4425. Dry whey down $0.0050 at $0.3350.  One sale was made at that price. Butter up $0.04 at $1.4875.  Four trades were made ranging from $1.4825 to $1.4925. Nonfat dry milk up $0.0050 at $1.0250.  Two sales were made at $1.02 and $1.0250.

The grain market saw fireworks on the overnight Sunday trading session before selling off some of the gains midday.  December corn traded as high as $3.6425 before settling lower to $3.5775/bushel.  November soybeans were up 3 cents to $9.5350/bushel.  September soybean meal finished $3 higher to $304.60/ton.  September Chicago Wheat climbed 5 cents to $5.4425/bushel.  Fats and feeders started the week on a higher note.  October Live Cattle rose 40 cents to $105.30/cwt.  October feeders ended 45 cents higher to $140.62/cwt.  October crude oil fell 15 cents to $42.82/barrel.   

U.S. Milk Production Update – Aug ’20

U.S. milk production figures provided by the USDA were recently updated with values spanning through Jul ’20. Highlights from the updated report include:

  • U.S. milk production increased on a YOY basis for the 12th time in the past 13 months, finishing 1.5% above the previous year and reaching a record high seasonal level.
  • The Jul ’20 U.S. milk cow herd rebounded 2,000 head from the six month low level experienced throughout the previous month. Milk cow herd figures finished 37,000 head above the previous year but remained 86,000 head below the 23 year high level experienced during Jan ’18.
  • U.S. milk per cow yields increased 1.1% on a YOY basis throughout Jul ’20, despite Western U.S. yields finishing lower YOY for the second time in the past three months.

Additional Report Details According to the USDA, Jul ’20 U.S. milk production declined 1.8% on a daily average basis but remained 1.5% higher on a YOY basis, reaching a record high seasonal level. The month-over-month decline in production volumes was smaller than the ten year average June – July seasonal decline in production of 2.9%. The smaller than normal seasonal decline in milk production volumes occurred despite previous month production volumes being revised 0.3% above levels previously stated.U.S. milk production volumes had finished higher on a YOY basis over 61 consecutive months from Jan ’14 – Jan ‘19, reaching the longest period of consecutive growth on record, prior to declining by a total of 0.3% from Jul ’19 – Jul ’19. Milk production volumes rebounded throughout more recent months, however, finishing higher over 12 of the past 13 months through Jul ’20. The 12-month rolling average milk production growth rate reached a two year high throughout Jul ’20.YOY increases in production on a percentage basis were led by South Dakota (+11.5%), followed by Indiana (+6.0%) and Colorado (+5.8%), while production volumes finished most significantly lower YOY on a percentage basis within Florida (-5.7%), New Mexico (-5.3%) and Vermont (-5.3%). Overall, 17 of the 24 states milk production figures are provided for experienced YOY increases in production throughout the month.California milk production volumes increased on a YOY basis for the seventh consecutive month throughout Jul ’20, finishing up 0.5%. California accounted for 18.3% of total U.S. milk production volumes throughout the month, leading all states.Eight of the top ten largest milk producing states experienced YOY increases in production throughout Jul ’20, as milk production within the top ten milk producing states increased by a weighted average of 1.2% throughout the month. The aforementioned states accounted for nearly three quarters of the total U.S. milk production experienced during Jul ’20. Production volumes outside of the top ten largest milk producing states increased 2.3% on a YOY basis throughout the month.Jul ’20 YOY increases in milk production on an absolute basis were led by Texas, followed by Pennsylvania and Idaho, while YOY declines in production on an absolute basis were most significant throughout New Mexico.The Jul ’20 U.S. milk cow herd rebounded 2,000 head from the six month low level experienced throughout the previous month. The U.S. milk cow herd currently stands at 9.352 million head, finishing 37,000 head above the previous year but remaining 86,000 head below the 23 year high level experienced during Jan ’18.U.S. milk per cow yields finished 1.1% above previous year levels, rebounding to a four month high growth rate. The YOY increase in milk per cow yields was the 56th experienced throughout the past 57 months. Yields experienced throughout the Midwestern states of Wisconsin, Minnesota, Iowa and Illinois finished 2.4% higher on a YOY basis however yields experienced throughout the Western states of California, Idaho, Washington and Oregon declined 0.2% YOY, finishing lower for the second time in the past three months.Month-over-month increases in milk cow herds experienced throughout Indiana, Michigan, Washington, Ohio and Utah more than offset MOM declines in the New Mexico, Oregon, Vermont and Florida milk cow herds during Jul ’20.YOY increases in milk cow herds continued to be led by Texas, followed by Idaho and South Dakota, while Wisconsin experienced the largest YOY decline in their milk cow herds throughout the month. 

SOurce: Atten Babler

U.S. dairy export volume up 28% in June

In the first half of 2020, export value is up 13%, volume up 14%.

U.S. dairy exports in June were up 28% by volume and 22% by value, capping a first half of double-digit growth. This year’s gains have been all the more impressive in that they were achieved during one of the most disrupted dairy trade environments in history.

In June, U.S. suppliers shipped 206,411 tons of milk powders, cheese, whey products, lactose and butterfat, the most (on a daily-average basis) since April 2018. The value of all exports was $583.7 million.

On a total milk solids basis, U.S. exports were equivalent to 17.7% of U.S. milk solids production in June, the highest rate since April 2018. In the first half of the year, exports were 15.8% of production, up from 14.1% in the first half of 2019.

chart70 (3)


Headline highlights in June included record cheese exports, continued robust sales of nonfat dry milk/skim milk powder (NDM/SMP), ongoing recovery of whey sales, and record shipments of fluid milk/cream. Overall volume gains vs. a year ago came from Southeast Asia, China and the Middle East/North Africa (MENA) region, plus a welcome improvement in sales to Mexico.

Cheese exports in June were 38,427 tons, 29% more than last year and the most ever. Much of this volume represents deals booked in April and May when U.S. cheese prices were at historic lows. The unit value of shipments was just $3900/ton, the second lowest over the last nine years.

chart72 (3)


Mexico came back to buy the most cheese in two years, posting a 62% gain compared with a year ago. Sales to South Korea also were strong, up 56%, and shipments to China more than doubled.

Exports of NDM/SMP topped 75,000 tons for the second straight month, coming in at 75,831 tons in June, up 77% from a year ago. Sales to Southeast Asia were lower than the previous two months, but still more than double the June 2019 volume. Growth came from Malaysia, the Philippines, Indonesia and Vietnam. Meanwhile, Mexico made its largest purchases in eight months, posting a 13% gain vs. a year ago. Mexico buying was encouraging, on the heels of a 21% decline in the first five months of 2020.

chart71 (3)


U.S. suppliers also sold nearly 10,000 tons combined to China and the MENA region (mostly Egypt); a year ago they sold less than 800 tons to the two markets. In the first half of the year, exports to the MENA region were up more than five-fold.

U.S. whey exports continued to trend higher on the strength of recovering sales to China, the top market for U.S. whey. Total whey shipments were 44,794 tons, up 8% from last year and the most since August 2018. Dry whey exports were up 42%. Sales of whey protein isolate (WPI), though less than the November-April levels, were still 30% more than last year. With strong global demand for protein, U.S. WPI exports were up 27% in the first half of the year.

China’s whey needs are expanding, largely due to swine herd restocking following last year’s African Swine Fever outbreak. June volume was the most since May 2018, and up 79% from last year. This offset a continued slump in whey sales to Mexico (-52%).

U.S. suppliers exported 13.4 million liters of fluid milk/cream in June, up 17% from last year and the most ever. Sales to Taiwan were a record high, while shipments to Canada doubled.

Lactose exports in June were 33,184 tons, on par with prior months but down 4% from last year. Shipments to China continued to improve (+19%), while sales to Southeast Asia were up 10%. In both markets, demand for use in infant formula was strong.

Among other products, shipments of milk protein concentrate (+28%), butterfat (+15%) and food preps/blends (+17%) were higher. Volume of whole milk powder (-2%) continued to lag.

To use interactive charts with current and historical trade data, see usdec.org’s page on U.S. export data

To download a printable PDF summary with charts showing June trade data in detail, click here.     

Milk Futures Turn Lower in Chicago Thursday

On the Chicago Mercantile Exchange milk futures were mostly lower Thursday while cash markets were mixed. Selling pressure entered the Class III space following spot cheese trade.  It seems as if the market is looking for further verification of dairy finding favour following the announcement of an additional $1 billion going into the Farmer to Family Food Box program.  Ultimately, details beyond the announcement remain vague.  Cash settled cheese futures have also built carry into the fourth quarter of 2020.  Some of that carry premium was removed today as October declined 2.25 cents/lb and November/December dropped 3.50 cents/lb, respectively.  Class III weakened 27 cents in September, 16 in October, 27 in November, and 33 in December.  January also lost 26 cents while the remaining months in 2021 were down single digits.  Class IV markets were mainly unchanged.

In spot trade, dry whey up $0.0050 at $0.3350.  Three sales were made at $0.33 and $0.3325. Blocks down $0.0075 at $1.8650.  Six trades were made ranging from $1.8650 to $1.89. Barrels up $0.0025 at $1.44.  Nine trades were made ranging from $1.4325 to $1.4525. Butter down $0.0325 at $1.4675.  Seventeen trades were made ranging from $1.4650 to $1.4850. Nonfat dry milk down $0.0050 at $1.0150.  Three sales were made at $1.0125 and $1.0150.

Grain prices rose once again as weather, exports, and managed money continues to drive the market.  Hot and dry weather throughout August has caused concern regarding the 2020 crop.  The U.S. drought monitor shows the entire state of Iowa as at a minimum of “abnormally dry” or worse.  Northern Illinois/Indiana also shows dry spots with southern Michigan showing up this week too.  Exports were either within expectations or exceeded them this morning.  Flash sales of corn to China helped run December corn 4.25 cents/bu higher on the day to $3.585/bu.  Soybeans took out resistance and ended 17.75 cents higher at $9.42/bu.  The wheat complex gained 7-11 cents/cwt as well.

Milk Futures Make Reversal and Show Strength in Chicago Wednesday

On the Chicago Mercantile Exchange milk futures made a reversal Wednesday after being limit up the day before as traders correct overbought positions.  Commodity markets across the board were stronger.  Class III futures saw significant strength today.  August lost 1 penny to $19.60/cwt. September to December milk settled limit up.  Quarter 4 average is $17.66/cwt.  First half 2021 gained 8-40 cents for an average price of $16.45/cwt. Class IV futures also printed green.  September milk climbed 12 cents to $13.28/cwt. November finished 19 cents higher to $14.46/cwt.  December saw the most strength, adding 40 cents to $14.76/cwt.

In the CME Cash Dairy Product trade, Dry whey up $0.0050 at $0.33.  Five sales were made ranging from $0.3250 to $0.33. Blocks up $0.0425 at $1.8725.  Three trades were made at $1.8375 to $1.87 Barrels up $0.0325 at $1.4475.  Four trades were made ranging from $1.4275 to $1.4425. Butter down $0.02 at $1.50.  Eight trades were made ranging from $1.49 to $1.5125. Nonfat dry milk up $0.0075 at $1.02.  Five sales were made at $1.0175 and $1.02.

The grain market joined in on the higher price movement.  December corn launched a 9.50 cent gain to $3.5450/bushel.  November soybeans broke through $9.20 resistance, adding 14.50 cents to settle at $9.2025/bushel.  September soybean meal gained $2.50 to $291.60/ton.  September Chicago Wheat climbed 6.50 cents to $5.2725/bushel.  October live cattle was up 85 cents to $108.77/cwt.  September feeder cattle settled 22 cents higher to $143.07/cwt.  October crude oil gained 75 cents to $43.37/barrel.    

Spot Cheddar Markets Retreat Once Again

The spot Cheddar markets retreated once again. They lost a lot of ground, but they at least tried to put up a fight. Barrels regained some territory late in the week, signaling that the market is fumbling about for fair value. Blocks lost ground every day, but they still finished higher than last week’s lows. Both blocks and barrels closed 17ȼ in the red, preserving the wide spread between the two commodity cheeses. Blocks settled at $1.65 per pound, while barrels floundered to $1.33.

There is plenty of milk in the Midwest, thanks to unusually mild late-summer weather in the Great Lakes states and a lackluster start for back-to-school milk bottling. Spot loads continue to move at a discount, prompting cheesemakers to top up their vats. In a few months, a new facility in Michigan will open its doors, and regional cheese supplies will climb further. Demand is mixed. Foodservice continues to struggle, with the notable exception of pizzerias, while sales at retail remain brisk. After recent declines in the cheese markets and the dollar index, U.S. cheese is starting to look more competitive in the export arena.

CME spot whey added a penny this week and closed at 33.5ȼ. But the Class III markets focused on the more significant drop in cheese values, causing a rout in the futures. September Class III plunged $1.75 to $15.13 per cwt. Fourth quarter futures lost 70ȼ on average.

Spot Class IV products rallied this week. CME spot butter advanced 3ȼ to $1.515. Cream demand has perked up a bit, which is slowing churn rates. Extremely hot weather in some of the most populated parts of the country has likely boosted ice cream demand. Print butter continues to move through retail quickly, and grocers anticipate a strong baking season ahead. But home cooks may do less entertaining for the holidays this year.

Skim milk powder (SMP) values climbed 1.1% at Tuesday’s Global Dairy Trade (GDT) auction, while whole milk powder – and all other dairy products – fell flat. After adjusting for protein, GDT SMP is equivalent to nonfat dry milk (NDM) at roughly $1.29 per pound. Stronger SMP markets in both Oceania and Europe helped to lift U.S. milk powder. CME spot NDM gained 3.25ȼ this week to 99.75ȼ. U.S. milk powder is priced to move abroad. Domestic demand is steady. Cheesemakers continue to buy milk powder to fortify their vats.

Although butter and powder values moved higher at the spot market, the futures held back. Traders are clearly wary about long-term demand prospects. Class IV futures settled a little lower today than they did last Friday. The September contract fell 9ȼ to $13.26.

Enticed by the promise of $20+ milk – in the futures, although not in reality, for most – U.S. dairy producers did their best to top up their bulk tanks in July. National milk output reached 18.6 billion pounds, up 1.5% from the prior year. USDA also revised upward its estimate of June milk production. Dairy producers don’t typically add cows in July, when springers are in relatively short supply, but this year low slaughter rates translated into a slightly larger milk-cow herd. There were 9.352 million cows in milk parlors last month, up 2,000 head from June and the first month-to-month increase since March. The dairy herd was 37,000 head larger than in July 2019.

Milk output topped the prior year in most of the major dairy states. Better milk yields drove the bulk of the increase. Dairy producers managed to improve milk production per cow in most regions. However, in the Pacific Northwest and Idaho, supply management programs and steep discounts on excess milk kept output per cow in check. In the Southeast, sweltering temperatures dampened milk yields. In the Southwest, both factors were in play.

This month, the weather is having an even bigger impact on milk output. A heat wave is scorching California and the Southwest. In California’s Central Valley, home to the nation’s greatest concentration of dairy cows, record-breaking temperatures are stressing the herd. The heat has been sufficiently severe and prolonged that it is raising death tolls and likely stymieing conception, which could trim springer supplies at the margins next year.

Once cooler autumn weather arrives, milk output is likely to bounce back. Going forward, gains in U.S. milk production will depend primarily on milk yields, as there are very few places with room for a lot more cows. Limitations on expansion are likely a blessing in disguise, as the industry probably won’t need a more milk until the pandemic is contained and the economy is on firmer footing.

It was a dry week in the Corn Belt, and the crops are starting to look parched. Soil moisture reserves are largely depleted, and there isn’t much rain in the forecast until late next week. In many areas, yields are still likely to be above average, but hopes for a record-breaking corn crop are slowly evaporating. The recent dry spell may be particularly hard on the soybean crop as it transitions from the pod-setting to the important pod-filling stage. Estimates of corn and soybean yields are starting to slip from the recent, nearly euphoric highs. The Pro Farmer crop tour called for a national average corn yield of 177.5 bushels per acre, well short of USDA’s latest forecast at 181.8. For soybeans, Pro Farmer called for a 52.5 bushel per acre yield. USDA stands at 53.3.

USDA reported another big week for new crop soybean exports, further lifting bean values. There is potential for large U.S. corn exports as well, but there is still plenty of grain in South America, so significant rallies on LaSalle Street will make U.S. corn less competitive. December corn settled today at $3.405 per bushel, up 2.5ȼ for the week. At $9.0475, November beans are 6ȼ higher than they were last Friday.

The original post can be viewed at: https://www.jacoby.com/market-report/spot-cheddar-markets-retreat-once-again

Markets Show Strength in Chicago on Tuesday

Commodity markets across the board were stronger at the Chicago Mercantile Exchange.  Yesterday afternoon, President Trump announced the USDA will spend $1 billion in the Farmers to Families Food Box program under the Coronavirus Food Assistance Program.  

Class III futures saw significant strength today.  August lost 1 penny to $19.60/cwt. September to December milk settled limit up.  Quarter 4 average is $17.66/cwt.  First half 2021 gained 8-40 cents for an average price of $16.45/cwt.

In the CME Cash Dairy Product trade, Dry whey down $0.0050 at $0.3250.  One sale was made at that price. Blocks up $0.10 at $1.83.  Barrels up $0.0450 at $1.4050.  Five trades were made ranging from $1.4050 to $1.4150. Butter up $0.0050 at $1.52.  Four trades were made ranging from $1.52 to $1.54. Nonfat dry milk up $0.0175 at $1.0125.  Two sales were made at $1.0125 and $1.0150.

Markets start the week higher in Chicago Monday

On the Chicago Mercantile Exchange milk futures found strength Monday supported by strong cash cheese movement.  Class III milk quietly followed cheese. Aug gained 1 to 19.61, September gained 67 tp 15.80, and Oct gained 58 to 16.91/cwt. Balance of 2020 and 2021 markets saw gains of 5-47 cents Class IV milk failed to follow along. Aug fell 5 cents to 12.80, Sept fell10 to 13.16 and Oct was unchaged at 13.89/cwt. 

Cheese jumps higher in a quiet dairy trade.  Blocks up $0.08 at $1.73.  Barrels up $0.03 at $1.36.  Five trades were made ranging from $1.36 to $1.37. Butter unchanged at $1.5150.  Nine trades were made ranging from $1.5075 to $1.53. Nonfat dry milk down $0.0025 at $0.9950.  Two sales were made at $0.9850 and $0.9975. Dry whey down $0.0050 at $0.33.  Two sales were made at $0.33 and $0.3325. 

Feed and Grain markets moved higher with Dec corn up 4 ½ cents to 3.45 even, November soybeans gained a penny to 9.05 ¾, and Soybeanmeal fell 1.10 to $289.10/ton

The USDA released the July cold Storage information. Butter inventories came in at 373 Million lbs, up 10 Million lbs since June compared with the 5 year average of a 3 million lb drop. Total cheese stocks came in at 1.393 billion lbs, up 32 million lbs from July 2019. 

Milk Futures Drop Lower in Chicago Wednesday

Milk futures closed lower again Wednesday pressured by declining global prices and cash cheese markets.  Class III futures saw further weakness today.  August milk declined 33 cents to $19.51/lb.  September fell 58 cents to $15.42/cwt.  October tumbled 35 cents to $16.57/cwt.  Class IV futures were mixed, ranging from positive 3 to negative 15.

Sellers have continued to push spot cheese lower in the CME Cash Dairy Product Trade.  Blocks down $0.0875 at $1.71.  One trade was made at that price. Barrels down $0.0825 at $1.3175.  One trade was made at that price. Butter up $0.0025 at $1.5225.  Twenty-two trades were made ranging from $1.51 to $1.5350. Nonfat dry milk up $0.0025 at $1.0150.  Three sales were made at $1.0125 and $1.0150. Dry whey unchanged at $0.34. 

 

December corn lost 2 cents to $3.3975/bushel.   November soybeans added ¼ of a penny to $9.14/bushel.  September Chicago Wheat increased 4.50 cents to $5.12/bushel.  Fats and Feeders both saw strength.  August live cattle gained 75 cents to $107.47/cwt.  August feeders climbed 32 cents to $143.55/cwt.  September crude oil finished 7 cents lower to $42.82/barrel.     

Milk Markets Move Lower in Chicago Tuesday

What goes up, must come down. Red moved into our markets on Tuesday, with Class IV showing some strength on the Chicago Mercantile Exchange.  Milk futures closed lower Tuesday pressured by mostly lower cash trade and declining global markets.  Class III Milk fell 1 in Aug to 19.84, Sept fell 40 to 16.00, and October gave back 25 cents to 16.92/cwt.  2021 was quieter with prices varying from 8 lower to 4 cents higher.  Class IV Milk gained 1 in Aug to 13.15, Sept was unchanged at 13.51, and Oct gained 13 to 14.32/cwt. 2021 saw gains of 5-21 cents 

The CME spot trade saw similar declines.  Dry whey down $0.0025 at $0.34.  Three sales were made at $0.3375 and $0.34.  Blocks down $0.0175 at $1.7975.  Barrels down $0.06 at $1.40.  One trade was made at that price. Butter down $0.02 at $1.52.  Eighteen trades were made ranging from $1.5250 to $1.5450. Nonfat dry milk up $0.0325 at $1.0125.  Six sales were made ranging from $1.00 to $1.0225.

The Global Dairy Trade event started out day with the index of Oceana dairy products down 1.7% from the previous event 2 weeks ago. Skim milk powder was the only category to trade higher, up 1.1 percent.  Cheddar, -3.6 percent, lactose, -3.3 percent, and anhydrous milk fat, -2.9 percent, were the loss leaders at the biweekly event.

Milk Futures Start the Week Lower in Chicago

Class III milk rolled in this week looking to continue its momentum higher that ended last week with on the Chicago Mercantile Exchange. Milk futures started the week in lower trade pressured by declining cash cheese markets. Class III milk couldn’t sustain its rally following spot as futures dropped 44 cents in September to $16.44. Fourth quarter prices fell 15-23 cents while 2021 was up slightly. Class IV prices traded around 15 cents higher. 

Futures traded as high as 30 cents stronger before the CME spot dairy auction where bids found initially but not for long.  Dry whey up $0.0175 at $0.3425.  Three sales were made ranging from $0.3350 to $0.3425.  Blocks down $0.0050 at $1.8150.  Four trades were made at $1.8225. Barrels down $0.04 at $1.46.  Three trades were made ranging from $1.4550 to $1.5025. Butter up $0.0550 at $1.54.  Six trades were made ranging from $1.5357 to $1.5575. Nonfat dry milk up $0.0150 at $0.98.  Three sales were made at that price.

Grains continued its rally following last week’s USDA report and Iowa storm damage. Corn rose 6 and three-quarter cents to $3.44 and three-quarters. Soybeans jumped 16 and a half cents to $9.15 per bushel.

Cheese and Milk Futures Climb Higher in Chicago Thursday

On the Chicago Mercantile Exchange Milk futures were again higher Thursday supported by strengthening cash cheese prices. Class III milk futures rose 30 cents in August following the National Dairy Product sales report on a strong basis number in the cash market. Fourth quarter 2020 rose 10-20 cents per cwt. to an average of $16.70 per cwt. First half 2021 struggled, losing 5-10 cents per cwt. 

After a month of consistently lower prices in both the cheddar blocks and barrel market, cheese finally found some support. Blocks up $0.0950 at $1.70.  Three trades were made ranging from $1.6750 to $1.70.  Barrels up $0.0350 at $1.50.  Eight trades were made ranging from $1.47 to $1.50. Butter down $0.0250 at $1.45.  Twenty-six trades were made ranging from $1.45 to $1.4725. Nonfat dry milk up $0.0275 at $0.97.  Four trades were made ranging from $0.96 to $0.97. Dry whey unchanged at $0.31. 

 

Milk Futures Mostly Higher in Chicago Wednesday

On the Chicago Mercantile Exchange, Milk futures were mostly higher Wednesday supported by a return in positive cash cheese prices. Class III milk futures rose 30 cents in August following the National Dairy Product sales report on a strong basis number in the cash market. Fourth-quarter 2020 rose 10-20 cents per cwt. to an average of $16.70 per cwt. First half 2021 struggled, losing 5-10 cents per cwt. 

After a month of consistently lower prices in both the cheddar blocks and barrel market, cheese finally found some support. Blocks up $0.0250 at $1.6050.  Four trades were made ranging from $1.60 to $1.6050.  Barrels up $0.02 at $1.4650.  Thirteen trades were made ranging from $1.4450 to $1.48. Butter down $0.0475 at $1.4750.  Nine trades were made ranging from $1.47 to $1.4850. Nonfat dry milk up $0.0025 at $0.9425.  Fourteen trades were made at $0.94 and $0.9425. Dry whey unchanged at $0.31. 

 

Milk Futures Higher while Cash Trade Mostly Lower Tuesday in Chicago

On the Chicago Mercantile Exchange milk futures were mostly higher while cash trade was mostly lower Tuesday. 

Class III milk futures were mixed today.  August milk lost 4 cents to $19.39/cwt.  September gained 7 cents to $16.31.  October added 15 cents to $16.69/cwt.  November milk climbed 9 cents to $16.60/cwt.  December milk increased 5 cents to $16.27/cwt.  1st half 2021 settled 5-21 cents higher at an average of $16.38/cwt. Class IV milk futures increased slightly.  August milk remains at $13.16/cwt.  September ascended 12 cents to $13.20/cwt.  October surged 17 cents higher to $13.68/cwt.  First half 2021 average is $14.98/cwt.  

Butter was the lone product to post a gain in the CME Cash Dairy Product Trade.   Butter up $0.0450 at $1.5225.  Two trades were made at $1.5225 and $1.5250. Dry whey down $0.0050 at $0.31.  Two trades were made at that price. Blocks down $0.05 at $1.58.  Three trades were made ranging from $1.58 to $1.6075.  Barrels down $0.03 at $1.4450.  Three trades were made ranging from $1.4450 to $1.48. Nonfat dry milk down $0.0025 at $0.94.  Six trades were made at $0.9375 and $0.94.

The grain complex saw modest gains today.  December corn added ½ a penny to $3.2350/bushel.  November soybeans inched a ¼ cent higher to $8.7350/bushel.  September Chicago Wheat climbed 2.75 cents to $4.95/bushel.  August Live Cattle rallied $1.05 to $104.65/cwt.  August feeders gained 92 cents to $144.40/cwt.  September Crude Oil declined 39 cents to $41.55/barrel.

Milk Markets Start Week Mixed in Chicago

Mixed day in the dairy markets on the Chicago Mercantile Exchange. Milk futures started the week to the higher side as traders correct oversold positions while cash markets were lower.  Class III milk quietly traded in the green. August gained 7 cents to $19.43, September gained 1 to $16.24, and Oct gained 2 to $16.54 per cwt.  Class IV milk was mostly unchanged. August at $13.16, September fell 8 cents to $13.08, and October held at $13.51 per

The CME spot trade saw all of our products slide lower on good volumes. Dry whey down $0.0050 at $0.3150.  Two trades were made at that price. Blocks down $0.0750 at $1.63.  Three trades were made at $1.6275 and $1.63.  Barrels down $0.0375 at $1.48.  Ten trades were made ranging from $1.48 to $1.5325. Butter down $0.0525 at $1.4775.  Eleven trades were made ranging from $1.45 to $1.5225. Nonfat dry milk down $0.0125 at $0.9425.  One trade was made at that price.

Grain markets saw some movement higher. December corn gained to 2 ¼ to $3.23 even, November soybeans gained 5 ¾ to $8.73 ¼, and soybean meal gained $2.20 to $282.20 per ton. 

CWT Assists with 3.5 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 16 offers of export assistance from CWT that helped them capture sales contracts for 94,799 pounds (43 metric tons) of Cheddar cheese, 41,888 pounds (19 metric tons) of butter, 597,453 pounds (271 metric tons) of cream cheese, 1.157 million pounds (525 metric tons) of anhydrous milkfat, and 1.874 million pounds (850 metric tons) of whole milk powder. The product is going to customers in Asia, Central and South America, the Middle East and Oceania. It will be delivered from August through November 2020.

CWT-assisted member cooperative export sales contracts for 2020 total 22.203 million pounds of American-type cheeses, 6.288 million pounds of butter (82% milkfat), 3.117 million pounds of anhydrous milkfat, 4.382 million pounds of cream cheese and 31.345 million pounds of whole milk powder. The product is going to 28 countries in seven regions. These sales are the equivalent of 694.6 million pounds of milk on a milkfat basis.

Assisting CWT members in moving dairy products overseas through the Export Assistance program is critical during the challenging times U.S. dairy farmers and cooperatives are facing. The Export Assistance program helps in strengthening and maintaining the value of dairy products that directly impact producers’ milk price. The program is helping member cooperatives grow and maintain world market share for U.S dairy products and is a significant factor in maintaining the total demand for U.S. dairy products and the demand for U.S. farm milk.

Dairy product and related milk volume amounts reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to bidders only when export and delivery of the product is verified by required documentation.

Milk Futures Lower In Chicago Thursday

On the Chicago Mercantile Exchange, milk futures turned mostly lower Thursday with cash trade providing very little market direction. August was the only month able to post a gain in Class III.   August milk climbed 29 cents to $19.84/cwt.  September milk fell 9 cents to $16.91.  October declined 20 cents to $17.14.  November milk tumbled 31 cents to $16.91.  First half 2021 is averaging $16.33/cwt.  

It was a quiet day in the CME Cash Dairy Product Trade.  Dry whey unchanged at $0.32.  Blocks unchanged at $1.8150.  Barrels unchanged at $1.6425. Butter up $0.0175 at $1.5575.  Nine trades were made ranging from $1.54 to $1.57. Nonfat dry milk down $0.0175 at $0.9550.  Five trades were made ranging from $0.95 to $0. 9550.

The grain complex was mixed.  December corn inched ½ of a penny higher to $3.2375/bushel.  November beans fell ¾ of a penny to $8.78.  August soybean meal declined $1.60 to $280.70/ton.  September Chicago Wheat decreased 9.50 cents to $5.0125.  October Live Cattle lost 47 cents to $106.97/cwt.  September feeders dropped 60 cents to $145.87.  September crude oil fell 18 to $42.01/barrel.     

The FAO Dairy Price Index – July 2020

The FAO Dairy Price Index averaged 101.8 points in July, up 3.5 points (3.5 percent) from June. In July, quotations for all the dairy products represented in the index rose, moving the overall value 0.7 points (0.7 percent) above the corresponding month last year and for the first time above pre-pandemic level. Quotations for milk powders, especially whole milk powder (WMP), rose on account of strong import demand by Asian buyers with some concerns over the eventual size of export availabilities in Oceania in the 2020/21 production season. Meanwhile, although they remained below the pre-pandemic levels, quotations for butter and cheese continued to increase, buoyed by robust import demand amid seasonally declining export supplies and steadily rising internal demand in Europe.

Class III Bounces Back in Chicago Wednesday

Volatility continues as Class III bounces back Wednesday, on the Chicago Mercantile Exchange. Milk futures turned higher as traders worked to correct oversold positions, cash markets were mostly lower.  September Class III traded almost a $1.30 range higher and lower to settle the day in the green.  August finished the day 27 higher to $19.55, September up 33 to $17.00 and October finished 53 higher to $17.34/cwt. Fourth quarter of 2020 is averaging at $17.09/cwt as November finished 76 higher and December gained a whopping 60 cents back.  Class IV milk also surged higher. August up 23 to $13.08, Sept up 8 at $13.02, and Oct up 35 cents to $13.50/cwt.  July Class III price was announced at $24.54/cwt, Class IV at $13.76. 

This all came after a giant volume trade in the CME spot market.  Dry whey down $0.01 at $0.32.  Eight sales were made ranging from $0.3250 to $0.3325.  Blocks down $0.1150 at $1.8150.  Nine sales were made ranging from $1.8025 to $1.82. Barrels down $0.1725 at $1.6425.  Nine trades were made at $1.62 to $1.6425. Butter down $0.1150 at $1.54.  Three trades were made ranging from $1.5225 to $1.54. Nonfat dry milk up $0.0275 at $0.9725.  One trade was made at that price. 

Dairy prices plummet at GDT auction as China demand slackens

Dairy product prices plummeted at this morning’s Global Dairy Trade (GDT) auction, the main price index falling by 5.1 per cent as demand from North Asia slackened. The decline follows a smaller dip of 0.7 per cent a fortnight ago and a big jump in early July.

Whole milk powder prices dropped 7.5% overall. Regular grade WMP to ship in October fell 7.6%. 

“This was a greater decline than the NZX Dairy Derivatives market had anticipated ahead of the event,” NZX dairy analyst Amy Castleton said.

“WMP prices fell 8.2% for product for next month shipping (shipping in September), indicating that buyers have filled their urgent needs for WMP. Buying from North Asia was up against the July 21 event, and up slightly against the equivalent event last year.

“There was also a slight increase in volume purchased by Africa compared to the last event, but less than the equivalent event last year. The Middle East bought less at this event than the equivalent event last year and both South/Central America and South East Asia/Oceania bought twice as much WMP than they had at the July 21 event, suggesting there is still some demand for WMP at this price point.”

Skim milk powder (SMP) fell 4.6% while butter prices dropped 2.8%, further losing gains made in early July. 

Anhydrous milkfat (AMF) gained 3% while lactose saw a price rise of 5.7%, moving the average price to $1349/t. Cheddar prices dropped 5.3% with Africa buying the most.

 

Dairy Markets Take a Blood Bath in Chicago Tuesday

On the Chicago Mercantile Exchange a vast swath of red filled the markets on Tuesday as traders hit the sell button. Milk futures were again limit down Wednesday pressured by declining global markets and significant declines in cash trade ahead of a bearish dairy product report. Class III milk markets were beaten up hard following product trade. August collapsed $1.10, September lost the limit of $1.50 per cwt, and October was down 90 cents per cwt.  Unfortunately, the pain inflicted didn’t stop there with November off 50 cents and December through most of 2021 10-30 cents lower. Class IV markets were down 40-60 cents in 2020. 

Dry whey unchanged at $0.33.  Blocks down $0.1475 at $1.93.  Thirteen sales were made ranging from $1.93 to $2.05. Barrels down $0.2050 at $1.8150.  Five trades were made at $1.8150 and $1.87. Butter down $0.1550 at $1.4250.  Twenty-five trades were made ranging from $1.4250 to $1.50. Nonfat dry milk down $0.02 at $0.9450. 

Grains watched corn fall 8 cents to a new contract low of $3.20 per bu. Soybeans lost 14.5 to $8.81 ¾ while the wheat complex ranged from 4-12 cents in the red. 

Global Dairy Commodity Update August 2020

While dairy commodity markets in major producing regions have generally weakened, specific factors continue to influence prices, creating diverging trends.

Fundamentals are likely to steadily worsen in the coming months as milk supply expands faster year-on-year and demand slows as recession takes hold.

The YOY declines in trade are getting smaller, aided by lower prices for fats and milk powders. The coming months will likely see a continuation of major trends seen here recently – weaker cheese and butter trade due to COVID-19 exposures, alongside improved powder demand at attractive prices.

The “staggered reactivation” of food service sales is playing out. COVID-19 restrictions will continue to ease but the re-opening of foodservice outlets (seen in the US, Australia, and parts of EU) will be disrupted by “second wave” outbreaks. As was the case on the way into dealing with this pandemic, Government approaches will vary as they navigate choices between health and economic impact. This will ensure a slow and bumpy recovery in food service channels while business and tourism travel will remain limited until well into 2021.

Milk production growth in the EU and US is increasing, while domestic demand – sustained by strong grocery channel sales for cheese and butter – will be increasingly vulnerable to the effects of recession. The ongoing impacts of “trading down” by shoppers and reduced discretionary spending will weaken overall demand and increase price sensitivity.

Global protein and fat prices will generally be driven by the risk of stock-build in SMP and butter as milk supplies expand and cheese producers try to match demand. This risk is highly contingent on the sustainability of growth in cheese demand in Europe as well as prospects for increased exports, while acute tightness in the US cheese situation will gradually alleviate.

Oceania markets have been buoyed by sustained demand for WMP from China. But in this and other developing regions, butterfat and cheese demand are highly exposed to restricted food service demand, while buyers make hand-to-mouth commitments for ingredients.

Skim Milk Powder
SMP and NFDM spot values were steady through July as recovery from the COVID-19 continues.

Whole Milk Powder

Spot values have improved through July with NZ prices lifting through the month as GDT prices jumped, now selling at premium to EU product. Stronger Chinese demand at GDT events in July saw values jump significantly.

Cheese

In the US, overall cheese demand will remain under pressure. There will be a slow recovery in foodservice trade with the dire COVID-19 situation likely to extend mobility restrictions. Government purchases are likely to continue but at much smaller volumes and income subsidies are expected to taper in Q4, affecting household incomes.

Butter

Global butterfat prices continue to converge, as Oceania markets weakened due to poor demand. EU and US butter and cream prices were steady with improved retail butter demand.

Whey
Whey product prices have steadied in both the EU and US after falling in June, as COVID-19 shifted production from cheese.

The whey complex generally remains in oversupply with weak demand for higher concentrate products and expanding cheese output in the US. Dry whey prices weakened recently despite the improved trade volumes.

By Dustin Boughton, Procurement Director, Maxum Foods – Your partner in dairy
Graph Reference: Fresh Agenda

-Ends –

For more information or interviews contact:

Dustin Boughton | Director, Procurement – Maxum Foods
Ph: +61 409 629 866
dustin@maxumfoods.com

Maxum Foods

Maxum Foods is one of Australia and New Zealand’s principal suppliers of dairy ingredients to the Human Health and Nutrition, as well as the Animal Nutrition industries. Maxum Foods specialises in supplying medium to large-scale food manufacturers with high-quality dairy ingredients such as milk powders, cheese and butter. Backed by top-level technical support and a huge dairy ingredient range, Maxum Foods have open global supply channels to source exactly what our customers need.

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