This Week In Dairy 03-10-2023

March 10, 2023


Class III Lower, Class IV Stagnant

The second month Class III contract failed to add onto yesterday’s gains but was overall higher on the week.  The contract bounced 15 cents higher for the week and stayed above a trendline dating back to 2020.  The Class IV second month contract worked in the opposite direction and has traded even or lower over the last four weeks, losing 36 cents this week and over a dollar during the last four weeks.  The Class III and IV prices are not the only dairy products converging recently, the spread between spot cheese blocks and barrels has collided this week, leaving only a one cent premium on blocks, that premium was 37.5 cents to start the week.  That collision can be associated with regional cheese reports showing barrel inventories getting back to healthy levels as demand for cheese, despite strong production, is fair in the US.  Cheese demand in Europe is being reported as strong, with their domestic producers keeping busy production schedules and not growing inventories, while total cheese exports reported for January up over 15%YoY.  Butter exports were the only dairy product to show YoY reductions in exports, a 13% drop from 2022, pressuring nearby butter futures to new lows for the month and for the current move to the downside.


  • Quarterly Class III prices for the week:  Q1 down 1 cent to $18.307, Q2 up 4 cents to $17.94, Q3 down 3 cents to $19.23, and Q4 down 4 cents to $19.51
  • Quarterly Class IV prices for the week: Q1 down 7 cent to $19.057, Q2 down 33 cents to $18.39, Q3 down 20 cents to $19.37, and Q4 down 11 cents at $20.00
  • Changes to the Federal Milk Marketing Order are being proposed for the next Farm Bill
  • GDT Auction this week down 0.70%, cheese down 10.20%
  • Corn made new lows for the move – lowest since August ’22


Corn Continues on Path Lower

  • Corn is trading slightly higher today as prices near support levels at 6 dollars and gets some support from Argentina’s lower crop rating
  • The USDA reduced estimates for Argentina’s crop to 40 mmt but now the Rosario Grain Exchange and Buenos Aires Exchanges are estimating lower at 36 mmt
  • Because Brazil’s bean harvest is running behind due to moisture, some of their corn crop will be seeded outside the ideal window and could affect production
  • Despite good export sales last week, export sales commitments are 39% below a year ago but prices are becoming more competitive
  • Canada has entered into disputes along with the US over Mexico’s new corn laws
  • The most recent deadline for the Black Sea grain deal is looking on 3/18, price action indicates that market expects another extension on the agreement

Soybean Meal Finds Small Gains

  • The US Climate Prediction Center signaled the end to La Nina, and more than 50% chance of El Nino developing between July and September
  • The Rosario Grain Exchange reduced the Argentinian soy crop by 7.5 million metric tons to 27 MMT, this would be the smallest crop on record since 1999
  • The Brazil crop is also being trimmed, with Conab forecasting 151.4 MMT, a 1.5 MMT cut, due to some regional drought issues
  • The USDA lowered the US Soybean ending stocks by 15 million bushels to 210 million bushels
  • US exports were raised by 25 million bushels to 2.015 billion bushels versus 2.158 billion bushels exported last year
  • This was partially offset by a 10 million bushel reduction to crush demand
  • World ending stocks were lowered 2.2 million tons to 100.01 million tons though this was within the range of analysts’ estimates


Friday’s Market Quotes



Michael Minster

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