This Week in Dairy 01-20-2023

January 20, 2023

 



Milk Futures Lower on the Week

Second month Class III and IV milk futures both closed lower on the week, losing 34 and 38 cents, respectively.  Last week these contracts managed to move higher despite a struggle in the spot markets but this week’s selling pressure was too much to overcome.  Quarterly milk prices for both Class III and Class IV were mostly lower for 2023, except for Class III Q4 contracts that were up nearly a dime per CWT from last week.  Most other quarters were down over 20 cents on the week with Class IV Q3 leading the charge lower with a weekly loss at nearly 55 cents.  The GDT event from the beginning of the trade week was down just a point from the previous event on 1/3. The global markets are sitting at 2-year lows, adding pressure to the US trade. This could bring US export demand into question. Prices from this last event were roughly $2.01/lb for butter and $2.20/lb for cheddar.

  • Spot cheese was markedly lower with losses near 15 cents per pound
  • Spot whey continues to nose-dive with the spot market losing 7.5 cents
  • Spot butter was up last week but lost just over 10 cents per pound this week
  • Spot powder followed the market down as well, 8 cents per pound lower on the week


 

Corn Holds on to Recent Gains

  • Corn futures continued higher this week, tacking on another 1.25c per bushel, but did finish the week about 12c off of the high
  • The market is still fairly rangebound as the calendar gets closer to planting. Front month corn seems content where it is now unless a new catalyst pops up
  • The Buenos Aires Grain Exchange said 5% of Argentina’s corn crop is rated good to excellent and 47% is rated poor
  • US ethanol production increased to 1.008 million barrels per day this past week
  • There are good chances for more rain in both Argentina and the US Southern Plains over the next two weeks


Soybean Meal Reverses Near Resistance

  • The soybean meal market put in a bit of a reversal this week, falling $12.60 lower and closing about $25 off of the high
  • The Buenos Aires Grain Exchange has Argentina’s soybean crop rated just 3% good to excellent and 60% rated poor
  • Brazil’s soybean crop is still expected to be a potentially record large 153 mmt
  • Soybean meal is sitting near multi-year highs and is overbought. A correction lower could be expected
  • Private exporters reported sales of 220,000 mt of soybeans for delivery to unknown during the 2022/2023 marketing year


 

Friday’s Market Quotes

Author

Evan Disher

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