February 10, 2023
2023 Dairy Prices In the Green
Milk prices for 2023 were solidly in the green this week. The 2023 average for Class III rebounded after three down weeks with 26 gains and the Class IV average climbed for the second straight week with 41 cent gains added to last week’s 40-cent gains. Much of those gains can be attributed to gains in the second month contracts where Class III rose 24 cents on the week while Class IV second month rose 33 cents. Besides cheese, the spot markets found gains with whey, powder, and butter all continuing to climb after hitting recent lows. Cheese, conversely, continues to work lower as waning exports and building inventories loom over the market.
- Dairy cow culling continues to be well above last year’s numbers, for the week ending 1/28 culling was 7% higher than last year
- The most recent Global Dairy Trade Event from 2/7 saw the index rise 3.2% overall
- GDT butter was up 6.6% at $2.15/lb while GDT cheddar prices were up 2.3% to $2.26/lb
- The latest export data from 2/7 showed dairy exports falling in December from strong November numbers
- Total US dairy imports for the month of December were also down from year-ago levels, -10.6% for butter and -2.1% for cheese
Corn Direction Sitting Sideways
- March corn futures rose just 3 cents per bushel as the nearby corn market appears to be coiling up
- Similar to nearby prices, December corn futures are also moving sideways and failing to break above $6 per bushel
- The Buenos Aries Grain Exchange reported an improvement in the good to excellent ratings to 20% with 34% of the crop rated poor to very poor, improvements after recent rains
- Brazil’s corn exports were increased by 3 mmt to 50 mmt, and China is now Brazil’s main customer for both corn and beans
- China’s investment in Central Brazil has spurned large increases now and upcoming for Brazil’s corn ethanol production
Soybean Meal Retesting $500
- For the third time in a weeks time, March meal futures have tested the $500/ton level, failing each time
- The beginning of this week saw a strong selloff in the March contract, a flat Wednesday, and a strong rebound on Thursday and Friday
- The Buenos Aires Grain Exchange increased their good to excellent rating for beans to 13% from 12% last week, but poor to very poor rose 2% to 48% of the crop
- The Argentinian exchange also lowered their production estimates to 38 mmt from 41 mmt which is far below USDA expectations
- US Soybean carryout for the current marketing year was raised 15 million bushels to 225 million bushels due to lower projected crush demand
Friday’s Market Quotes
Author
Michael Minster