Archive for Dairy Markets

GDT event up by 1.2%

Today’s Global Dairy Trade Event 257 has concluded with the GDT Price Index up by 1.2%.

Key results are as follows:

AMF index up 0.4%, average price US$4,345/MT

Butter index up 4.5%, average price US$4,263/MT

BMP index down 11.9%, average price US$2,446/MT

Ched index up 0.2%, average price US$4,395/MT

LAC index up 4.4%, average price US$959/MT

RenCas index down 2.6%, average price US$9,717/MT

SMP index down 0.8%, average price US$2,514/MT

SWP index not available, average price not available

WMP index up 2.1%, average price US$2,820/MT

Milk futures across the board higher in Chicago Tuesday

On the Chicago Mercantile Exchange milk prices across the board were limit higher in both Class III and Class IV. May Class III milk futures  up 75 cents to $12.58.  June 75 higher at $13.80.  July through September contracts also up 75 cents.

On the commodities Dry whey unchanged at $0.33. Blocks steady at $1.1275. Barrels up $0.01 at $1.10. Butter $0.01 higher at $1.2650. Nonfat dry milk up $0.0375 at $0.90.  Three trades were made at $0.90.

Milk Futures Whiplash Monday in Chicago

Dairy markets causing whiplash on Monday as we Class III move from limit down in May during early trading to rebound and see August trade limit up in the afternoon on the Chicago Mercantile Exchange.   Class III milk finished a volatile day with a tale of two halves. April – June was in the red with April falling 19 to 13.88, May down 35 to 11.83 and June fell 8 to 13.05. July however gained 32 cents to 14.40 and the balance of 2020 saw gains of 24-41 cents in a late day rally.  Class IV milk saw similar swings, April was unchanged at 11.36, May fell 13 to 11.02, and June was unchanged at 11.54. Second half months mixed from 13 lower to 19 higher. 

Dry whey steady at $0.33. Blocks down $0.0225 at $1.1275.  Barrels down $0.0475 at $1.09.  Four trades were made, with a range of $1.09 to $1.10. Butter down $0.0250 at $1.2550. Nonfat dry milk unchanged at $0.8625.

4.4 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 28 offers of export assistance from CWT that helped them capture sales contracts for 2.013 million pounds (913 metric tons) of Cheddar and Monterey Jack cheese, 330,693 pounds (150 metric tons) of butter, 132,227 pounds (60 metric tons) of anhydrous milkfat, 74,957 pounds (34 metric tons) of cream cheese, and 1.803 million pounds (818 metric tons) of whole milk powder. The product is going to customers in Asia, Central and South America, and the Middle East. The products will be delivered from April through September 2020.

CWT-assisted member cooperative export sales contracts for 2020 total 10.869 million pounds of American-type cheeses, 1.607 million pounds of butter (82% milkfat), 132,227 pounds of anhydrous milkfat 1.915 million pounds of cream cheese and 10.593 million pounds of whole milk powder. The product is going to 22 countries in six regions. These sales are the equivalent of 232 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and all dairy cooperatives by strengthening and maintaining the value of dairy products that directly impact their milk price. It does this by helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has significantly expanded the total demand for U.S. dairy products and the demand for U.S. farm milk.

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

All dairy farmers and dairy cooperatives should invest in CWT. Membership information is available on the CWT website.

The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit www.cwt.coop.

Global Dairy Commodity Update – April 2020

Dairy markets continue to experience deep impacts from COVID-19 through lockdowns of people in many major countries, disrupting trade and shutting large segments of the food market to consumers.

Uncertainty grows as we are only in the early stages of the pandemic which will continue to rapidly evolve over the coming months.

The impacts of lockdowns to control the spread of disease on employment in major business sectors will transform into staggered and uncoordinated measures to unwind restrictions and settle into a deep recession in major economies – the length and depth of which depends on many factors.

These profound changes will significantly impact the upstream supply chain, causing changes in product mix in response to major shifts in product demand – mainly due to weaker cheese demand – to avoid large production of mozzarella and processed cheese. The short surge in retail sales, as consumers shifted to eating at home, has eased.  

Commodity markets reflect those risks, influenced also by supply-side dynamics as milk output builds towards the seasonal peak in Europe and the US. Demand from importing developing regions remains robust, including a recovery in Chinese business and consumer activity, conditional on COVID-19 being held in check.

While the market crash has been sudden, milk price signals and supply side impacts will lag.

Commercial and policy measures may intervene to address surplus milk supplies and take excess product off the market – kicking the can down the road into a scenario that global markets have only just shaken off.

Skim Milk Powder
SMP prices have fallen with the expected rapid stock build – initially as a result of slowing of global trade with restrictions on freight and logistics. The risk has escalated with the expected increase in SMP and NFDM production as major producers avoid production of cheese exposed to food service markets which have been decimated by COVID-19 lockdowns.  

Whole Milk Powder
European spot prices rose in March after softening in February as global markets continued to be disrupted by the spread of COVID-19. NZ values dropped under US$3,000/t mid-March and continued to slide through the month. NZ shipped prices rose, widening the gap to South American shipped values.

WMP prices cannot remain immune from falling protein and fat values. The weaker global economic outlook – especially with the uncertainty ahead for oil-producing countries – is likely to see further preference for FFMP, which may gain improve share in more traditional WMP markets.

Cheese
These profound changes will significantly impact the upstream supply chain, causing changes in product mix in response to major shifts in product demand – mainly due to weaker cheese demand – to avoid large production of mozzarella and processed cheese. The short surge in retail sales, as consumers shifted to eating at home, has eased.  

Global cheese markets are likely to be heavily impacted by the sudden loss of sales into food service. The US industry is most-exposed with near 50% of cheese sales reliant upon food service outlets.

Global cheese trade had a long sustained run of growth from Q4-2018 into early 2020 and grew 7% in the 3 months to January.

Butter
Butterfat markets have weakened with the risks to demand for butter, AMF and cream from the shutting of food service channels in major markets.

Butter markets in the EU and Oceania were delicately poised prior to the impact of major lockdowns in March 2020. Prices had steadied in EU wholesale markets as demand improved and export markets (only about 10% of EU output) surged.

Whey
Commodity whey prices have been caught in the impacts of COVID-19 on the wider dairy complex, which continues to be weighed by the contraction of demand for commodity whey in the Chinese and other Asian animal feed markets.

US dry whey output increased 10% in the 6 months to January as producers scaled back WPC output and demand for dry whey improved, including some switching from milk protein use with steadily rising prices.

Source: maxumfoods.com

Mixed Markets in Chicago Thursday

On the Chicago Mercantile Exchange milk futures mostly higher, cash dairy mostly steady Thursday.  May Class III milk futures down 24 cents to $12.88.  June up 4 to $13.60.  July through September contracts 11 to 19 cents higher.

Dry whey steady at $0.33. Blocks down $0.04 to $1.27. Barrels unchanged at $1.1750.  Eleven trades were made, ranging from $1.1750 to $1.19. Butter steady at $1.31.  Four trades made, with a range of $1.3050 to $1.31. Nonfat dry milk unchanged at $0.8750.

No April Fools Milk Futures Rebound in Chicago Wednesday

It was no April’s fool joke for Class III Milk futures.  Class III milk saw April fall 4 to 14.45, but the balance saw nice gains. May up 38 to 13.12, and June gained 50 cents to 13.56. July forward gained 37-55 cents to average at 14.89/cwt. Class IV milk recouped some losses as well. April up 2 to 11.54, May gained 40 cents to 11.73 and June gained 19 to 11.87/cwt. 

The CME spot trade saw Dry whey steady at $0.33. Blocks down $0.02 to $1.31.  Barrels down $0.03 to $1.1750. Butter down $0.0250 to $1.31.  Five trades were made, ranging from $1.31 to $1.3225. Nonfat dry milk down $0.01 at $0.8750.  Eleven trades made, with a range of $0.86 to $0.88.

Grain markets didn’t follow the milk trend. Corn fell 6 cents to 3.34 ¾, Soybeans fell 23 ¼ cents to 8.62 ¾, and Soybean meal fell $6.60 to $314.90/ton. 

Coronavirus Continues to Infect Markets in Chicago Tuesday

On the Chicago Mercantile Exchange Cash Dairy Product trade were negative once again today.  Class III milk futures were pressured on the heels of a lower cheese product trade.  April milk was down 20 cents at $14.75.  May declined 31 cents to $12.82.  June milk slid 9 cents to $13.23.  Second half 2020 lost 7-31 cents and is now averaging $14.61/cwt. Class IV milk futures tumbled downwards.  April milk suffered a 37 cent loss to $11.52.  May milk drifted 20 cents to $11.33/cwt.  July milk was 7 cents lower to $12.02.  Second half lost 7-48 cents and is now averaging $12.50.

Dry whey steady at $0.33 Blocks down $0.1075 at $1.33. Barrels down $0.0950 at $1.2050.  Seven trades were made, ranging from $1.21 to $1.2575. Butter down $0.0625 at $1.3350.  Five trades made, with a range of $1.3350 to $1.3625. Nonfat dry milk down $0.01 at $0.8850.

Spot corn inched ½ cent lower to $3.4075/bushel.  Nearby soybeans finished 3.75 cents higher to $8.86.  May soybean meal was $4 lower to $321.50/ton.  May Chicago Wheat rallied 5.5 cents to $5.77/bushel.  Kansas Wheat rose 6.25 cents to $4.93.  Fats and feeders closed higher on the day.  June live cattle were up $3 to $92.075/cwt.  May feeder cattle finished $2 stronger to $122.90.

Red Ink Flooded LaSalle Street This Week and Dairy Markets Were Decimated

Red ink flooded LaSalle Street this week. The dairy markets were decimated. Every Class III and Class IV contract on the board scored new life of contract lows. The selloff was steep and widespread, but second-quarter contracts suffered most. May Class III plummeted $1.44 to a painfully low $13.87 per cwt. May Class IV fared even worse, falling $1.79 to an unbearable $12.28. At today’s prices, dairy producers in a region with roughly half of their milk check derived from Class III and half from Class IV will earn just $13.08 per cwt., and $13.83 on their Class I share.

Those numbers clearly won’t pay the bills, and after four painful years (and a couple good months) dairy producers are in no shape to weather this storm. Congress set aside billions of dollars for agricultural aid and for food purchases as part of its $2 trillion aid package, but the timing and structure of these payments are still unknown. The dairy safety net will provide a financial cushion for those who enrolled, but low participation in these programs reveals that many are vulnerable to the whims of an increasingly cruel market. Dairy producers insured quarterly floor prices on about 20% of the nation’s milk through Dairy Revenue Protection (DRP). Barring a steep recovery in milk prices, most of these policies are projected to pay indemnities. Less than half of all dairy producers representing 56.2% of the nation’s established milk production history – and a somewhat smaller share of today’s greater milk production – enrolled in the Dairy Margin Coverage (DMC) program, which is now projected to make payments in March through December. It’s likely that many dairy producers who signed up for DRP also enrolled in DMC, so much of the nation’s milk will be sold at very low values, without any safety net protections at all. Unless creditors are exceedingly patient, the industry is likely to suffer a tidal wave of sellouts.

The impact of Covid-19 is beginning to disrupt milk processing along the East Coast. Amidst fear of contagion, some of the labor force is staying home, forcing plants to run below capacity. As a result, more milk is sloshing around the rest of the nation and more tankers are hauling milk greater distances at a discount, even as fluid milk bottling remains elevated. Milk continues to fly off the shelf at grocery stores, although sales are not quite as high as they were during the initial panic-buying surge. Fluid milk is the lone bright spot in the dairy complex. Milk bottlers are skimming off huge volumes of cream, and churns are running hard. Cream is particularly abundant in the West, where cream multiples – the factor used to convert the butter price to a cream price – have dropped to multi-year lows.

America’s refrigerated warehouses were already bursting with butter before milk bottling ramped up. USDA reports that on February 29 there were 302.3 million pounds of butter in cold storage, the highest total for the month since 1993 and nearly 55 million pounds more than on January 31. The month-to-month build marked the largest January-to-February increase since 1992. February butter inventories are 24% higher than they were a year ago. We’re now adding to that stockpile, and the market is feeling the pressure. CME spot butter plunged 26.75ȼ this week to $1.4875 per pound, its lowest value since October 2013.

The cheese market was much healthier coming into the crisis. Cheese stocks climbed only slightly from January to February. At 1.36 billion pounds, February cheese stocks were 0.5% lower than a year ago. Inventories of American-style cheese, including Cheddar, were down 0.6%. Cheese is moving quickly at retail, but it is likely not replacing all the lost demand from foodservice. Although pizza delivery franchises are moving a lot of product, sit-down restaurants are not, and mozzarella sales are down. That means cheese makers are likely making a lot of commodity Cheddar. This week both blocks and barrels dropped to one-year lows. Spot Cheddar blocks fell 24.75ȼ to $1.59. Barrels closed at $1.34, down 9ȼ since last Friday.

Sales patterns are similar in Europe, with cheese moving in large volumes through retail channels. However, some European cheesemakers are finding it difficult to obtain the materials necessary to repackage bulk cheese into retail-friendly sizes. As the bloc struggles to contend with border controls for the first time in decades, bottlenecks are slowing the flow of product from the warehouse to grocers. That’s likely to translate into lost demand despite robust consumer appetites. European cheese stocks were tight before Covid-19 slowed markets. European cheese production grew just 0.3% year-over-year in 2019, and exports impressed. In January, Europe sent 19% more cheese abroad than it did the year before.

They spot whey market is holding steady, which is a victory in this environment. CME spot whey powder didn’t budge this week; it stands at 33ȼ per pound. The futures gained ground. In January and February, China imported 4.6% more whey than in the first two months of 2019, after adjusting for Leap Day. The U.S. continues to regain market share now that China has rescinded its punitive tariffs on U.S. whey.

Although Covid-19 was already raging through China in January and February, milk powder imports were better than feared. Combined imports of skim and whole milk powder fell 11.7% from a year ago, when Europe was aggressively moving out its Intervention stockpile and China was buying record volumes of cheap milk powder. Given slowdowns at Chinese ports and reports of very high domestic milk powder output earlier this year, these figures were positive. Now, however, the global trade has stalled. Sporadic port closures are likely to entangle international freight, and foreign buyers have lost considerable purchasing power. The milk powder market is the most dependent on exports, and it is likely to remain under pressure until the impacts of the virus subside. This week, CME spot nonfat dry milk (NDM) dove 6.75ȼ to 92ȼ, the lowest spot value since December 2018. Covid-19 has erased years of hard-won gains in the dairy markets.

Ethanol plants are slowing output or closing their doors altogether, disrupting the feed markets throughout the Corn Belt. The corn basis had been sky-high since the rains became problematic last spring, but now the basis is close to zero in much of the Corn Belt. Cash corn values are down hard. Dairy

producers and other livestock growers who fed distillers grains will have to adjust their rations, which likely means more soybean meal purchases. Unfortunately, soybean meal is one of the few commodities that has been rising in value.

The soy complex got some further support this week from fears that Argentina would halt exports. Port workers are demanding closures so that they can stay home until the virus recedes. But Argentina depends on export taxes and is likely to try to keep product moving, albeit at a slower pace.

May soybeans closed at $8.815, nearly 20ȼ higher than last Friday. At $323.10, soybean meal fell back $2.10 per ton after a sizable rally last week. The corn market inched upward from last week’s multi-year lows. May corn settled at $3.46 per bushel, up 2.25ȼ.

Source: Jocoby

Atrocious Day for Commodities in Chicago

On the Chicago Mercantile Exchange commodities across the board had an atrocious day. Class III milk futures showed no mercy today.  April tumbled 49 cents to $14.83.  May milk had 72 cents ripped out to $13.15 per cwt.  June milk was the biggest loser, finishing limit down at $13.25.  Second half 2020 lost 30-67 cents and is now averaging $14.75 per cwt.  

Class IV milk was not spared in the dairy beatdown.  April, May, and June did not have any trades today.  July milk suffered a 66-cent loss to $12.18 per cwt.  August fell 38 cents to $12.85.  September milk finished limit down to $12.75 per cwt.  Second half 2020 is now averaging $12.96 per cwt.

It was an absolute train wreck in the CME Dairy Product trade today as blocks where down $0.1525 at $1.4375. Barrels down $0.04 at $1.30.  Six trades were made, with a range of $1.2950 to $1.30. Butter $0.09 lower at $1.3975. Nonfat dry milk down $0.0250 at $0.8950.  Thirty-one trades made, ranging $0.8725 to $0.8950. Dry whey steady at $0.33. 

 

Markets Continue to Dive Downwards in Chicago Thursday

On the Chicago Mercantile Exchange  April Class III milk futures down 24 cents at $15.70.  May off 33 at $14.56.  June through August contracts 19 to 42 cents lower.

Butter $0.0675 lower at $1.59.  Two trades, with a range of $1.6025 to $1.61.  Blocks down $0.05 at $1.74.  Barrels down $0.0375 at $1.4025.  Three trades were made, ranging from $1.4025 to $1.42. Dry whey steady at $0.33. Nonfat dry milk down $0.0325 at $0.9650.  Ten trades were made, ranging from $0.9575 to $0.9650.

CWT Assists with 4.5 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 43 offers of export assistance from CWT that helped them capture sales contracts for 2.930 million pounds (1,329 metric tons) of Cheddar, Gouda, Monterey Jack and Swiss cheese; 651,347 pounds (75 metric tons) of butter, 149,914 pounds (68 metric tons) of cream cheese, and 1.208 million pounds (548 metric tons) of whole milk powder. The product is going to customers in Asia, Central and South America, the Middle East and Oceania. The products will be delivered from March through July 2020.

CWT-assisted member cooperative export sales contracts for 2020 total 8.565 million pounds of American-type cheeses, 1.276 million pounds of butter (82% milkfat), 1.540 million pounds of cream cheese and 7.161 million pounds of whole milk powder. The product is going to 19 countries in six regions. These sales are the equivalent of 172.1 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and all dairy cooperatives by strengthening and maintaining the value of dairy products that directly impact their milk price. It does this by helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has significantly expanded the total demand for U.S. dairy products and the demand for U.S. farm milk.

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

All dairy farmers and dairy cooperatives should invest in CWT. Membership information is available on the CWT website.

The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit www.cwt.coop.

UK dairy farmers face huge milk price reduction

FARM leaders have said they hope to meet with milk processor Meadow Foods over a 2p per litre (ppl) price drop next month for some Cumbrian farmers.

Meadow Food suppliers in Cumbria are braced for the whopping price drop after the processor – during two meetings in the county – blamed the drop on a range of factors, including the loss of an Arla contract.

Company representatives faced furious producers at two meetings, in Penrith and the Greenhill Hotel at Wigton, when it was revealed that the company proposed to drop their milk price in April and May consecutively. Farmers who attended the meetings heard the shrinking consumer market, the impact of coronavirus on exports, and the loss of an Arla contract all factored into the decision, which could see the price drop to 24ppl in April.

There has been speculation of a further reduction to 21ppl-22ppl in May, meaning some Cumbrian suppliers could expect a 5ppl milk price drop in total.

Some Cumbrian suppliers have taken to social media platforms to highlight the ‘unfairness of the situation’ and others walked out of the meetings. One producer said that some farmers had asked for their contracts to be terminated so they could make other arrangements for their milk, but Meadow Foods refused.

NFU dairy board chairman, Michael Oakes, said the union felt for the affected farmers who had very few options to mitigate the price drop. He said: “The discretionary pricing system used by many processors allows risk and pressure to be passed directly on to the farmer, leaving them to bear the cost.

Source: newsandstar.co.uk

Pricing Pressure Pushes Markets Lower in Chicago Tuesday

On the Chicago Mercantile Exchange product and milk pricing across the board felt pressure on Tuesday. Class III milk prices suffered 18-22 cent losses in the 2nd quarter to end up at $15.33 cents per cwt. Second half 2020 prices dropped 2-13 cents as well. Class IV markets took it on the chin even harder as months fell 30-55 cents per cwt April through September. 

Dry whey steady at $0.33. Blocks down $0.0250 at $1.79. Barrels down $0.01 at $1.44. Butter down $0.0575 at $1.6525. Nonfat dry milk down $0.0025 at $0.9975.  Two trades were made, with a range of $0.9950 to $1.00.

Over in the grain space, corn added 1 ½ cents, beans dropped 5, and the wheat complex was up 18 cents in Chicago, Kansas City 10 higher, and Minneapolis was 2 stronger. The cattle space lost a buck in the deferred months on fats, feeders and hogs. 

Milk Markets Calm in Chicago Tuesday

On the Chicago Mercantile Exchange, calmness started to return to commodity markets on Tuesday.  Class III milk was unchanged in March at $16.26 and April at $16.08. May fell 12 to $15.38 and July – Dec was mixed varying from 3 higher to 10 lower and averaging at $16.06 per cwt.  Class IV milk was unchanged at $14.90 for March, but fell sharply in the balance of 2020 April fell18 at $13.88, $May fell 28 to 13.69 and the second half fell 4-39 cents to average at $14.99 per cwt.

Dry whey unchanged at $0.33. Blocks down $0.0225 at $1.8150.  Four trades were made, ranging from $1.8150 to $1.8475. Barrels $0.02 higher at $1.45.  Eleven trades made, ranging from $1.43 to $1.45. Butter down $0.03 at $1.71.  Nonfat dry milk down $0.0050 at $1.00.  Four trades made, with a range of $0.9950 to $1.00.

Milk Markets Scattered, Product trade steady in Chicago to Start the Week

On the Chicago Mercantile Exchange commodity markets were mostly stronger to start out the week.   Class III milk future prices were scattered.  April gained 2 cents to $16.07/cwt.  May lost 10 cents to $15.21.  June dropped 5 cents to $15.47.  Second half 2020 is now averaging $16.11. The majority of class IV futures remained unchanged today.  May lost 11 cents to $13.96/cwt.  August tumbled 12 cents to $14.62/cwt.  Second half 2020 is averaging $15.09/cwt.    

In the CME Dairy product trade today, Dry whey was steady at $0.33. Blocks also unchanged at $1.8375. Barrels steady at $1.43. Butter down $0.0150 at $1.74. Nonfat dry milk up $0.0175 at $1.0050.  Nine trades were made, ranging from $0.9850 to $1.0050.

Spot corn inched ¼ cent lower to $3.4350.  Wheat and soybeans both had impressive moves higher today.  May soybeans leaped 21.5 cents to $8.84/bushel.  Nearby Chicago wheat jumped 23.25 cents to $5.6250.  May soybean meal rallied $8.40 to $333.60/ton.  Feeders and fats both saw strength, finishing limit up.  April Live Cattle are at 101.65 and feeders are at 123.325/cwt.

Dairy futures markets down as virus spreads across Europe

After months of relative stability, settled values on EU dairy futures have shifted down as the impact of the virus continued to be felt across the industry. Settled values on futures contracts provide a good indicator of how market participants expect prices to move, based on current conditions. The latest drops will reflect the concerns over the impacts of lower demand and rising product availability on dairy product prices.

The forward milk price equivalent (FMPE) value combines settled prices for butter and SMP futures contracts on the EEX exchange. Between Oct 2019 and Feb 2020, the FMPE remained in the region of €35-€39 cents/100kg for contracts expiring April through August.

As coronavirus spread across Europe however, market sentiment shifted, and settled prices fell. In early March, before governments starting restricting social mobility, FMPE fell about 11% to around €34c/100kg. More recently, we have seen a further drop, with FMPE falling to around €30c/100kg for contracts with April through June expiry dates.

Source: ahdb.org.uk

Corona hangover on global dairy markets

The coronavirus outbreak is weighing on the global dairy market outlook – but prices at this stage are not taking as big a hit as expected.

The Global Dairy Trade auction defied pundits’ expectations on Tuesday night, falling by 3.9 per cent, well below futures market predictions.

The key whole milk powder price was down 4.2pc compared with futures market predictions of a 9-11pc fall

Some commodities even bucked the downward trend with lactose up 4.9pc and cheddar up 2.6pc.

Westpac head of NZ strategy Imre Speizer said Tuesday night’s auction was expected to be the first to be significantly affected by the coronavirus outbreak, with global containment measures accelerating in early March.

“However, the 3.9pc fall is of a similar magnitude to the three previous auction falls (-4.7pc, -2.9pc and -1.2pc),” he said.

But Rabobank said the onset of the virus in the world’s largest dairy importer China and the permeation across the globe had dairy buyers and sellers scrambling to assess the market impact.

“Global dairy commodity prices have already priced-in the uncertainty,” Rabobank senior dairy analyst Michael Harvey said.

New Zealand bank ASB senior rural economist Nathan Penny said he anticipated NZ’s dairy and food exports were going to hold up relatively well.

“Indeed, we anticipate that global food demand is likely to remain firm (outside of premium foods) as food consumption is prioritised in household budgets,” he said.

“A good example of this is in China where food imports are being fast-tracked for entry via ‘green lanes’ at Chinese ports.”

Mr Speizer said since the outbreak, whole milk powder had fallen by 13.5pc, less than other globally traded commodities, including sugar, wheat, copper and crude oil.

“The evidence to date is that during this pandemic, dairy commodities have outperformed most major commodities, perhaps a testament to demand for core foods with health properties,” he said.

North Asian demand bounced back at Tuesday night’s auction, from a weaker showing at the previous auction.

“While demand for dairy products has been more robust than for other commodities, it is likely to remain affected by the economic fallout from the pandemic for some time,” Mr Speizer said.

Rabobank’s Dairy Quarterly report pointed to anticipated China’s consumer buying patterns normalising by the second half of 2020, with evidence of improvement in some supply chains already visible.

But the report said the risk of a setback or a delayed economic recovery in China presented a major downward price risk to Rabobank’s forecasts.

Against this backdrop, global milk production from the big seven exporters (NZ, United States, European Union, Australia, Brazil, Argentina, Uruguary) was rising.

The combination of reduced Chinese imports, significant supply chain disruptions, including extreme competition for shipping containers across the globe, and rising dairy surpluses in export regions would keep downward pressure on global markets through much of 2020, the Rabobank report said.

Dollar impact

The relative strength of the US dollar against both the Australian and NZ dollars is also helping airy exporters.

Mr Penny said although dairy prices in US dollar terms were materially lower than prior to the COVID-19 virus outbreak, the NZ dollar was offsetting these falls.

On a weighted average basis, overall prices had fallen 13.2pc over February and March but the 8pc decline in the NZD/USD in the same period meant that in NZ dollar terms, prices were down a more modest 5.3pc, he said.

Australian analyst FreshAgenda lifted both its Australian dairy export index and sport commodity milk value for southern Australian dairy manufacturers this week on the back of the weaker dollar.

Both hit record levels.

It said the Australian dollar lost almost five cents against the US dollar last week, ending at US$0.6178.

“The combined impact of these factors lifted the commodity milk value for southern Australian dairy manufacturers by 79 cents to $8.12 a kilogram milk solids,” it said.

Australian outlook

Rabobank said milk production across Australia’s southern export dairy region should continue to gather momentum heading into 2020/21.

It is forecasting Australian milk production to finish 4.9 per cent lower by the end of the 2019/20 season at 8.4 billion litres.

National production grew in January, confirming the minimal impact from the bushfires.

“The turnaround in production so far has been led by Tasmania and eastern Victoria, which account for 32 per cent of Australia’s milk production,” Mr Harvey said.

The Rabobank report said solid rain events across dairying regions at the start of 2020, combined with strong milk price signals and relief from feed costs, had supported on-farm investments and higher milk flows.

Source: northqueenslandregister.com.au

Milk Futures Rebound in Chicago Thursday

On the Chicago Mercantile Exchange April Class III milk futures closed 34 cents higher at $16.01.  May up 14 at $15.20.  June, July, and August contracts all 16 cents higher.

Dry whey up $0.01 at $0.33.  Blocks down $0.01 at $1.8625. Barrels down $0.0450 at $1.3875.  Butter up $0.03 at $1.70. Nonfat dry milk down $0.0025 at $0.9625.  17 trades were made, ranging from $0.9525 to $0.9650.

Unknown Economic Situations Hit Dairy Markets in Chicago Wednesday

On the Chicago Mercantile Exchange markets continue to struggle through unknown economic situations, dairy took a hit on Wednesday.  Class III milk fell sharply across the calendar. March fell 1 to $16.32, April fell 32 to $15.67 and May fell 41 cents to $15.06. Second half months fell as many as 49 cents with the average at $15.82 per cwt. Class IV dove even lower seeing limit moves in several months. March fell 15 to $14.89, April fell 58 to $13.52, and May fell 75 to $13.13 per cwt. Second half months moved 52-75 cents lower to average $14.30 per cwt. 

Dry whey down $0.0050 at $0.32.  Two trades were made, ranging from $0.32 to $0.3225. Blocks steady at $1.8725.  Barrels down $0.0675 at $1.4325.  Three trades made, with a range of $1.4325 to $1.48. Butter down $0.07 at $1.67.  Nonfat dry milk down $0.04 at $0.9650.  Seven trades were made, ranging from $0.9525 to $0.9675.

Grain was mixed – corn falling 8 ¾ cents to $3.35 ¼, soybeans gained 1 ¼ to $8.25 ½, and soybean meal moved $5.70 higher to $304 per ton.

China dairy imports to fall by 19% due to Covid-19

A new report from Rabobank has estimated that total dairy import volume in China will fall by 19% in 2020 due to the onset of coronavirus. 

Estimates were released in Rabobank’s latest Global Dairy Quarterly Q1 2020 report, which highlights how the current coronavirus situation across the globe has resulted in buyers and sellers ‘scrambling to assess the market impact’. 

The report has based its Chinese estimates on lower demand in retail and foodservice channels and build up in milk powder stocks, on top of larger carryover stocks, as well as further expansion in local milk production through 2020.

In China, dairy demand in liquid milk equivalent (LME) is predicted to fall by 8% in 1H 2020 prior to Rabobank’s previous forecast of a 2.4% increase. 

However, the bank anticipates that the forecast reduction will not be as severe as 2014-2015 stocking which resulted in a decline in LME imports of more than 35% over 12 months. 

According to Rabobank, China’s consumer buying patterns should normalise by the end of 2H 2020 with evidence of improvements in some supply chains already visible. 

The global milk production from the Big 7 global dairy exporters producers (the EU, US, New Zealand, Australia, Brazil, Argentina and Uruguay) meanwhile,  is predicted to rise.

For Q4 2019, year-on-year growth of dairy exports was recorded as 0.8%, marking its strongest quarterly gain since Q3 2018.  Each region is expected to report a consistent pace in Q2 2020 with a growth rate of 1%.

According to Rabobank, US milk production growth remains range bound although they refer to a ‘slightly gloomier outlook for dairy demand in the coming months’. 

In the EU, milk production is reportedly gaining momentum with mild winter conditions laying the foundations for a good spring flush.

December 2019 saw Australia return to growth in the southern export pool, while Rabobank expects milk collections in New Zealand to decline by 1% due poor weather and disrupted trade volumes to China. 

The combination of reduced Chinese imports, significant supply chain disruptions, including extreme competition for shipping containers across the globe, and rising dairy surpluses in export regions will keep downward pressure on global markets through much of 2020.

Due to growing measures taken to limit the spread of coronavirus, Rabobank said there could be a greater-than-expected negative impact on dairy demand and supply chains in the upcoming months due to falling tourist numbers already impacting foodservice sectors in several markets.

Source: foodbev.com

Dairy prices fall at fourth auction in a row on coronavirus factor

Dairy product prices fell by 3.9 per cent at this morning’s Global Dairy Trade auction – the fourth decline in a row.

The price of wholemilk powder – which has the greatest bearing on Fonterra’s milk price – fell by 4.2 per cent to US$2797 a tonne – its lowest point in more than a year.

Among the other Fonterra reference products, skim milk powder fell by 8.1 per cent to US$2527 a tonne.

Against the trend, butter prices rose by 0.3 per cent to $4144 a tonne.

Anhydrous milk fat rose by 1 per cent to US$4331 a tonne.

Rabobank said onset of coronavirus stalled the upward trajectory in global dairy prices visible in late 2019 and the hangover had continued.

The GDT Price Index moved lower by 4 per cent with average prices now sitting below US$3,000/tonne.

“Buyers and sellers are still scrambling to assess the market impact as the spread of the virus moves from China to more broadly across the globe,” the bank said.

Outside the reference products, cheddar prices rose by 2.6 per cent to US$4398/tonne and rennet casein rose by 1.0 per cent to US$9987/tonne.

In February, Fonterra reaffirmed its farmgate milk price and earnings forecasts for the year, despite uncertainty surrounding the outbreak of the coronavirus Covid-19 in China.

The co-op said its farmgate milk price forecast range would remain at $7-7.60 per kg and its full-year underlying earnings guidance would stay at 15-25 cents per share.

However, Fonterra revised its forecast milk collections for the 2020 season down from 1530 million kgMS to 1515 million kgMS, due to adverse weather.

The co-op is due to report its first-half result today at 8.30am.

Source: nzherald.co.nz

St Patrick’s day unlucky for Milk Markets in Chicago Tuesday

On the Chicago Mercantile Exchange Dairy Markets Unlucky, Class IV Taking the Hardest Hit. Class III milk was not a pot of gold and continued its trend downward today.  April milk lost 1 penny to $15.99 per cwt.  May milk fell 17 cents to $15.42 per cwt.  July-December milk dropped 16-30 cents and is now averaging $16.24 per cwt. Class IV milk was absolutely shamrocked today.  April milk lost 36 cents to $14.10 per cwt.  May fell 50 cents to $13.91 per cwt.  July-December milk was hit hard, dropping 35-57 cents per cwt and is now averaging $15.02 per cwt. 

Dry whey unchanged at $0.3250.  Blocks steady at $1.8725.  Barrels unchanged at $1.50. Butter down $0.325 at $1.74.  Five trades were made, ranging from $1.7350 to $1.75. Nonfat dry milk down $0.02 at $1.0050.  Ten trades made, with a range of $0.9950 to $1.0050.

Milk Markets Continue Lower in Chicago as Coronavirus continues to infect markets

On the Chicago Mercantile Exchange it was a different day with the same result.  Dairy prices for Class IV added 7 cents in April but lost 9-22 cents May through February 2021. The second quarter average finished at $15.77 while the second half of the year is offering $16.48 per cwt. The Class IV market was roughed up even worse as futures dropped 34 to 55 cents per cwt. The second quarter average stands at $14.41 per cwt. CME spot dairy auction results watched butter decline 4 cents per lb. to $1.77 and a quarter per lb. following a single trade. 

Dry whey down $0.0225 at $0.3250.  Five trades made, ranging from $0.3250 to $0.3350. Blocks unchanged at $1.8725.  Barrels steady at $1.50. Butter down $0.04 at $1.7725.  Nonfat dry milk down $0.0275 at $1.0250.

The grain complex watched corn fall 11 cents, soybeans were off 25 cents and the wheat complex softened 8 cents in Chicago and Kansas City.

Diary Markets Show Sings of Life in Chicago Thursday

On the Chicago Mercantile milk futures were mixed Thursday while cheese markets started to perk up for the week.  Class III milk prices finished lower here today.  April milk lost 3 cents to $15.80 per cwt.  May milk fell 14 cents to $15.79 per cwt.  Second half 2020 fell 8-12 cents and is now averaging $16.71 per cwt. Class IV milk prices were annihilated today.  March fell 41 cents to $15.11 per cwt.  April was 48 cents lower to $14.72 per cwt.  

Dry whey unchanged at $0.3475.  Blocks up $0.06 at $1.81.  One sale was made at that price.  Barrels up $0.0350 at $1.49.  Six trades were made ranging from $1.4550 to $1.4875.    Butter down $0.0050 at $1.8125.  Two trades were made at $1.8125 and $1.8150.  Nonfat dry milk down $0.0175 at $1.05.  Eighteen trades were made ranging from $1.04 to $1.05. 

Fats and feeders were both limit down here today.   Spot corn fell 8.75 cents to $3.6575 per bushel.  Spot Soybeans were amongst the hardest hit dropping 13.75 cents to $8.5950 per bushel.  May soybean meal finished $1.20 higher to $302.80 per ton.  

Milk Markets Slip Side in Chicago Wednesday

On the Chicago Mercantile milk futures were mostly lower at midweek while cash trade was mixed.  Class III markets finished one to five cents lower while Class IV markets were down 42 cents in March and 10 cents in April and the other commodity markets. 

Dry whey up $0.01 at $0.3475.  Two trades were made at $0.34 and $0.3425.  Blocks unchanged at $1.76.  Barrels up $0.0450 at $1.4550.  Eight trades were made ranging from $1.4150 to $1.4550. Butter unchanged at $1.8175. Nonfat dry milk down $0.0125 at $1.0675.  Two trades were made at $1.0675 and $1.07. 

Corn lost three cents with December ending at $3.77 per bushel soybeans were also down three at $8.6675. Soybean meal was up a dollar per ton and the wheat complex ended nine cents lower in Chicago and in Kansas City while Minneapolis was off six. The fat and feeder cattle markets were both limit down while hogs were off another dollar.

Milk Markets Turn Around Slightly in Chicago Tuesday

On the Chicago Mercantile milk futures turned around Tuesday as traders took back oversold positions.  Class III milk saw March gain 3 cents to $16.33, April gained 4 to $16.85, and May gained 3 to $15.99 per cwt. Second half months gained 2-7 cents respectively. Class IV milk also bounced back. Though March remained unchanged at $15.52, April gained 10 to $15.20, and May gained 19 to $15.29. Second half months saw 8-31 cent gain.

Dry whey up $0.0050 at $0.3375.  One trade was made at that price.  Blocks unchanged at $1.76. Barrels unchanged at $1.41.   Butter unchanged at $1.8175. Nonfat dry milk down $0.0025 at $1.08.  Three trades were made ranging from $1.0775 to $1.0850. 

 

Markets Continue to Erode in Chicago on Monday

On the Chicago Mercantile Milk futures closed lower Monday with coronavirus impacts continuing to erode markets.  Class III milk finished quite a bit lower today.  March was down 7 cents to $16.30 per cwt.  April milk was down 20 cents to $15.83 per cwt.  May fell the most, dropping 28 cents to $16.00 per cwt. Class IV milk continued to show weakness today.  April milk was down 30 cents to $15.10 per cwt.  May lost 40 cents to $15.10.  June milk took the biggest slide, dropping 47 cents to $15.30 per cwt.

Dry whey down $0.0150 at $0.3325.  Three trades were made ranging from $0.3325 to $0.3375.  Blocks up $0.01 at $1.76.  One trade was made at that price. Barrels down $0.0675 at $1.41.   Nine trades were made ranging from $1.4075 to $1.47. Butter down $0.0375 at $1.8175.  Seven sales were made at ranging from $1.8175 to $1.84. Nonfat dry milk down $0.0325 at $1.0825.  Eleven trades were made ranging from $1.06 to $1.0825. 

Coronavirus Virus Continues to Plague Milk Markets in Chicago

On the Chicago Mercantile milk futures adjusted higher Thursday while cash markets remain mixed with the storyline very much unchanged as coronavirus concerns continue on. Class III milk prices were on of the few bright spots adding 2-13 cents through the end of the year. Class IV months struggled and fell single digits in the nearby months. 

CME spot dairy auction results ended with dry whey up $0.0050 at $0.34.  Four trades were made at that price.  Blocks down $0.01 at $1.75.  Two sales were made at $1.7450 and $1.75. Barrels down $0.04 at $1.4775.   Four trades were made ranging from $1.4775 to $1.5125. Butter up $0.0150 at $1.88.  One sale was made at that price. Nonfat dry milk down $0.01 at $1.1250.  Thirteen trades were made ranging from $1.12 to $1.13. 

Grain markets turned in a round of lower trade with corn down 3 cents, soybeans off 10, and the wheat complex was down 1 in Chicago, and 7 in Kansas City and Minneapolis. Fat cattle lost $2 per cwt and feeders were $1.90 per cwt lower. The energy complex fell 75 cents while diesel dropped 4 cents per gallon. 

Mixed Markets Wednesday in Chicago

On the Chicago Mercantile Exchange it was mostly a negative day in Class III milk as we saw March up 4 cents to $16.38 per cwt.  April was down 5 cents to $16.03 per cwt.  Second half 2020 lost 2-12 cents and is now averaging $17.00 per cwt. March Class IV milk was the only month in green for Class IV today, rising 5 cents to $15.63 per lb.   April Class IV milk declined 10 cents to $15.55 per cwt and May lost 4 cents to $15.84 per cwt.  Second half 2020 Class IV milk is averaging $16.76 per cwt.

In the CME dairy product trade today,  Dry whey unchanged at $0.3350.  Blocks down $0.0025 at $1.76.  Barrels down $0.02 at $1.5175.  Butter up $0.0050 at $1.8650.  Nonfat dry milk down $0.0050 at $1.1350.  Five trades made, ranging from $1.13 to $1.14.

Corn continued its rebound higher today with May corn moving 3.75 cents higher to $3.85 per bushel.  May soybeans also finished 3.75 cents higher to $9.0725 per bushel.  May soybean meal finished $1.20 per ton lower to $308.90 per ton.

Third Consecutive Drop in Global Dairy Trade Prices

The Global Dairy Trade auction index in New Zealand continued lower as global markets continue to react to coronavirus fears. The index declined 1.2 percent to $3,112 per ton. Butter milk powder had the largest decline, down 4.8 percent, followed by cheddar, down 4.7 percent, and skim milk powder, down 3.2 percent. Gains were seen in lactose, butter and rennet casein.

Key Results:

MF index down 1.7%, average price US$4,302/MT

Butter index up 1.0%, average price US$4,131/MT

BMP index down 4.8%, average price US$2,718/MT

Ched index down 4.7%, average price US$4,285/MT

LAC index up 5.7%, average price US$871/MT

RenCas index up 0.5%, average price US$9,891/MT

SMP index down 3.2%, average price US$2,747/MT

SWP index not available, average price not available

WMP index down 0.5%, average price US$2,952/MT

Record dairy prices set to fall: ABARES

The Australian farmgate milk price is expected to fall by 2024-25 after hitting record levels in 2019-20, according to the Australian Bureau of Agriculture Resource Economics.

ABARES analyst Andrew Duver said farmgate milk prices had hit record levels this year due to drought-induced constraints on supply and a lower dollar.

But this would not last, as supply stabilised and the dollar appreciated.

The market was also vulnerable to price and supply shocks, while the Australian industry would face potential challenges from climate variability and higher irrigation water prices.

The story Record dairy prices set to fall: ABARES first appeared on Farm Online.

Markets Mixed After Declining Global Dairy Trade in Chicago Tuesday

On the Chicago Mercantile Exchange milk futures took note of declining global trade reports and ended Tuesday lower while cash trade was mixed. Class II and Class IV had a mismatch day after Global Dairy Trade event 255 kicked off the morning.  Class IV milk surged higher – March gained 13 to $15.58, April gained 11 to $15.65 and May gained 14 to $15.88. November saw the biggest gain in the futures months gaining 40 cents to $16.93.  Class III however saw March fall 3 to $16.34, April took the biggest move lower – losing 20 to $16.08 and May fell 10 to $16.28 per cwt. 

Dry whey down unchanged at $0.3350.  Blocks down $0.0050 at $1.7625.  Two sales were made at $1.7575 and $1.7625. Barrels down $0.0475 at $1.5375.   Four trades were made at that price. Butter up $0.03 at $1.86.  Two sales were made at $1.85. Nonfat dry milk up $0.03 at $1.14.  Nine trades were made ranging from $1.1325 to $1.14. 

Milk Futures Finally See Positive Moments in Chicago

On the Chicago Mercantile milk futures began March with a new leaf, seeing higher movement as traders take back losses from coronavirus fears. Class III milk futures markets added 5 to 17 cents on Monday. March to June milk futures are offering producers $16.42 cents per cwt. Second half 2020 closed the day at $17.04 per cwt. Class IV months climbed 20 to 47 cents April through December 2020. 

Dry whey down $0.0050 at $0.3350.  Blocks up $0.0450 at $1.7675.  Three sales were made ranging from $1.75 to $1.7675. Barrels down $0.0050 at $1.5850.   Three trades were made at $1.5850 and $1.59. Butter up $0.1050 at $1.83.  Four sales were made at $1.82 and $1.83. Nonfat dry milk up $0.0450 at $1.11.  Six trades were made at $1.10 to $1.11. 

Grain priced settled out with corn up 7 and a quarter in May at $3.75 and a half, soybeans added 8 cents and soybean meal closed at $3 per ton stronger. The wheat complex had Chicago down 2 cents, Kansas City was up 4 and a half, Minneapolis ended three-quarters of a cent higher. 

Fonterra holds steady on $7-$7.60 milk price forecast

Fonterra has already signed deals with suppliers in China, which should offset the impact of the coronavirus and has enabled it to maintain its forecast farmgate milk price range at $7.00-7.60 per kilogram of milksolids. 

The dairy giant has also reaffirmed its forecast full-year underlying earnings guidance of 15-25 cents per share, and revised its forecast milk collections for the 2020 season down from 1530 million kgMS to 1515 million kgMS.

ASB analyst Nathan Penny described it as a “reassuring and comforting” announcement, considering the speculation around coronavirus.

Chief executive Miles Hurrell was bullish about the forecast. 

“The momentum we saw in the first three months of the financial year has continued, and as we approach the interim results our underlying earnings are tracking well. However, given the potential significant risks that could arise from coronavirus in the second half, we are taking a prudent approach and maintaining our full-year forecast earnings range. 

The price to farmers is projected to be the same, but production will fall.

STACY SQUIRES/STUFF

The price to farmers is projected to be the same, but production will fall.

“The current situation is very fluid and uncertain. However, we have already contracted a high percentage of our 2020 financial year’s milk supply and this is helping us manage the impact of coronavirus,” Hurrell said.

While there had been a slow down in container processing at ports, products were continuing to be cleared by customs and quarantine officials.

Penny said what stood out to him was the confirmation that product was being cleared.

“That’s the important part, they’re getting their product in, it’s still being sold despite the issues. That’s what we suspected because Chinese buyers on the global dairy auctions have been active, albeit cautious.”

The ASB forecast is for $7.40. 

Because so many restaurants and food outlets had been closed, Fonterra’s food service sector had been adversely affected.

Milk collections were forecast to be down because of the dry conditions in Waikato and the north, and the extreme flooding in Southland.

Fonterra’s interim result will be announced on March 18.  

Source: Stuff

Coronavirus impacts weigh on cash markets and global trade in Chicago Thursday

On the Chicago Mercantile milk futures slid again Thursday as coronavirus impacts weigh on cash markets and global trade.  Class III milk saw February fall 2 to $16.99, March fello 15 to 16.32, and April fell 16 to 16.02/cwt. Class IV gained 4 in February but the balance of months were lower. March off 9 to 15.35, April fell 10 to 15.12, and May fell 20 cents to 15.20/cwt. 

Dry whey down $0.0150 at $0.3375.  Three sales were made at $0.34.  Blocks down $0.0375 at $1.7225.  Three trades were made ranging from $1.7225 to $1.7450.  Barrels unchanged at $1.59.  Three trades were made at $1.5875 and $1.59. Butter down $0.0250 at $1.6950.  Twenty-one sales were made ranging from $1.6750 to $1.70. Nonfat dry milk down $0.02 at $1.08.  Two trades were made at $1.08 and $1.0925. 

Soybeans turned higher midday to finish the day at 8.86 ¼, 5 ¼ cents higher, Soybean meal followed gaining $5.60 to 296.90/ton, however corn couldn’t find support, falling 6 cents to 3.64 ½. 

Coronavirus Continues To Slow Dairy Markets in Chicago

On the Chicago Mercantile milk futures continued mostly lower Tuesday as did cash trade.  Class III milk continued its slide lower outside of Feb that gained 2 cents to 17.03, March fell 9 to 16.53, and April fell 8 to 16..39/cwt. Class IV milk saw double digits move lower though February held unchanged at 16.17. March was down 17 to 15.38, and April fell 24 cents to 15.28/cwt. 

The CME spot Dairy Market saw limited volume for the second day.  Only 3 total loads traded across the 5 products for the week so far. Corona Virus continues to be our main market driver with lack of fresh spot market information.  Dry whey down $0.0175 at $0.3525.  Blocks down $0.0075 at $1.76.  Barrels unchanged at $1.59.  One sale was made at that price. Butter down $0.0075 at $1.73. Nonfat dry milk down $0.0350 at $1.1050.  Two trades were made at $1.1050 and $1.11. 

As Coronavirus Spreads, Milk Futures and Cash Dairy Start Week Mostly Lower

On the Chicago Mercantile Exchange milk futures started the week lower with limited cash news as the spread of coronavirus continued in China but also to other countries as well.  A broad-based commodity sell-off was witnessed as corn fell 4 and a half cents; soybeans were down 16 and a half and the wheat complex softened 10-17 cents. Cattle futures closed limit down in fats and feeders while lean hogs dropped $2.40 per cwt. Crude oil lost $2 and diesel was off 7 and a half cents per gallon. 

Class III and IV markets fell just like all other commodities. Prices declined 3-13 cents per cwt. in March through December in Class III while Class IV markets were walloped another 18-40 cents per cwt.

Dry whey unchanged at $0.37.  Blocks down unchanged at $1.7675.  Barrels unchanged at $1.59.   Butter down $0.0175 at $1.7375. Nonfat dry milk down $0.03 at $1.14. 

CWT Assists with 1.4 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted six offers of export assistance from CWT that helped them capture sales contracts for 44,092 pounds (20 metric tons) of Cheddar cheese, 70,548 pounds (32 metric tons) of cream cheese, and 1.323 million pounds (600 metric tons) of whole milk powder. The product is going to customers in Asia, Central and South America, and North Africa. The products will be delivered from February through May 2020.

CWT-assisted member cooperative export sales contracts for 2020 total 2.780 million pounds of American-type cheeses, 407,855 pounds of butter (82% milkfat), 827,836 pounds of cream cheese and 4.630 million pounds of whole milk powder. The product is going to 12 countries in six regions. These sales are the equivalent of 75.1 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and all dairy cooperatives by strengthening and maintaining the value of dairy products that directly impact their milk price. It does this by helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has significantly expanded the total demand for U.S. dairy products and the demand for U.S. farm milk.

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

All dairy farmers and dairy cooperatives should invest in CWT. Membership information is available on the CWT website.

The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit www.cwt.coop.

Milk Markets Lower in Chicago Thursday

Class III milk futures were lower on follow through selling on the Chicago Mercantile Exchange. Class III milk futures closed 9-22 cents lower. March is now trading at $16.67 per cwt. June and onward in 2020 still holds a price in excess of $17.00 per cwt. Class IV markets took it on the chin even harder. March milk lost 30 cents per cwt. while all other months declined double digits. 

In the cash market, cheese barrels were steady at $1.585 and blocks were down a penny at $1.80. Grade A nonfat dry milk was $.0175 lower at $1.1775, AA butter was down $.02 at $1.755, and extra grade dry whey held at $.37.

The commodity space watched red spread across the various markets on Thursday. Grains saw corn lose 2 and a half cents, soybeans fell 5 cents and the wheat complex softened 5-6 cents per bu. The meat markets followed suit as fat cattle dropped $1 and a half dollars per cwt., feeders softened 75 cents and hogs lost $1 per cwt. 

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