February 3, 2023
Strong Week For the Dairy Spot Market
There was a noticeable shift in the dairy spot trade this week as buyers finally started getting aggressive at these discounted prices. For the week, whey recovered 8.75c, butter added 10.25c, and powder gained 9.25c. There was steady buying across the board each session. The cheese market was pretty quiet, however, falling 0.875c overall and closing at $1.7475/lb for the week. Cheese had been the only product not in a strong downtrend, though. Dairy futures reacted positively to the strength in the spot trade and milk futures started working higher off of recent lows. Second month Class III finished the week 32c off of the low, while second month Class IV finished up 55c overall and up 70c from the low. News this week was quiet, but next week will have both a Global Dairy Trade auction and an exports report on Tuesday.
- It was reported this week that total US cheese production in December was 2.20% above the same month last year
- December butter production was reportedly up 3.90% above December 2021 production
- The Midwest Cheese report cited mixed demand for cheese. Barrel cheesemakers say they are worried about cheese inventory growth
- June 2023 Class IV milk rallied 74c this week as buyers returned to a very oversold market
Corn Direction Shifts Flat
- March corn futures fell 5.50 cents this week to close at $6.7750
- The front month contract has continually failed around the $6.85 mark, but so far the market has not turned lower
- Concerns have arisen in Brazil as they battle rain, while attempting to harvest soybeans and plant the Safrinha corn crop
- Informa lowered their estimate for Argentina’s corn production 2 million metric tons to 47 mmt
- The USDA attaché in Brazil estimates the corn crop to be up 8% YoY to 125.5 mmt
Soybean Meal To New Highs
- March soybean meal futures finished at $495.50, up $23.00/ton on the week
- This pushed the continuous chart above the high from last March to its highest level since 2014
- The USDA attaché in Argentina cut its estimate for the country’s soybean production to 36 million metric tons, 9.50 mmt beneath the last USDA estimate
- Meanwhile, Brazil is expected to harvest a record crop that could hit 153-155 mmt
- NASS estimated that 187 million bushels of soybeans were crushed in December, down from 198 mb in December 2021
Friday’s Market Quotes
Author
Dustin Jonasson