January 13, 2023
Second Month Futures Higher After Down Week
Second month Class III and IV futures were both higher this week following big losses from the week prior. Class III second month had a trading range of 23 cents and up 8 cents overall this week. Class III quarterly futures were as follow: Q2 down 2 cents, Q3 up nearly 22 cents, and Q4 down just over 2 cents. The Class IV second month contract had lost 74 cents last week but rebounded 27 cents higher this week to recoup some of those losses. Class IV quarterly futures were as follow: Q2 down 29 cents, Q3 down 26 cents, and Q4 down nearly 18 cents. Quarter one is historically the poorest performer for dairy and that is playing out currently in the markets. Fundamentals of growing cheese supplies, ample milk, and export strength waning, has put pressure on the markets.
- The spot cheese market continues to see saw and ends the week down over 5 cents per pound in Friday’s trade and locking in losses overall on the weeks prices
- Spot whey saw heavy volume as buyers took advantage of prices moving lower, down nearly 6 cents per pound this week
- Spot butter was the only gainer on the week with gains above 4 cents per pound
- Spot powder continues it trend lower losses on the week just over 4 cents per pound
Corn Bounces Higher Post Report
- Front month corn futures are up 21 cents per bushel this week
- US production was cut along with quarterly stocks, US ending stocks, and world ending stocks
- The USDA’s new ending stocks estimate of 1.242 bb is the second lowest in 9 years
- Net sales of corn came in at 255,700 mt for 22/23 and were down 20% from the previous 4-week average while exports of 387,100 mt were down 49% from last week
Report Gives Boost to Beans While Meal is Sideways
- Front month bean meal was lower in the beginning of the week, bounced higher pre-report, then ended lower to finish the week
- Argentina weather seems to be the biggest driver of bean meal prices, production estimates were lowered but some rains are forecasted in the near future
- The USDA decreases US production, quarterly stocks, and US ending stocks, but increased world ending stocks likely due to Brazil’s record crop
- US ending stocks were lowered from 220 mb to 210 mb due to lower production estimates for 22/23, and this number came in far below the average trade estimates
- Weekly soybean sales were not terrible but have been sliding in the past few weeks as China buys less
- Brazil’s soybean crop could be record large at 5.58 bb
Friday’s Market Quotes
Author
Michael Minster