May 5, 2023
Dairy Complex a Mixed Bag
- June Class III futures closed the week at $16.99, down 29 cents from last Friday’s close as it takes over as the running second month.
- For the week, spot cheese fell 6.75 cents to $1.57125/lb, hanging just above the 18-month low posted last week. Spot whey fell 2.50 cents.
- The June Class IV contract was up 22 cents on the week to $18.35, posting its third higher weekly close in a row.
- Spot butter pushed to a 5-month high this week, garnering 9.25 cents in gains overall. Spot powder closed 2.25 cents higher at $1.1975/lb.
- Today’s March Dairy Products Production report showed cheese output 0.2% below March 2022 levels, while butter production was up 1.4% YoY.
Class IV futures and the underlying spot markets had a solid week to start the new month. The roll to June as the second month brought that chart to a two-month high, spot butter is attempting to break above its 20-week-long sideways range, and the beleaguered spot powder market put together its fourth higher weekly close. The Class III complex has been less impressive with spot cheese hanging near its lowest level in a year and a half, while the second month contract posted its second week in a row with a close under $17.00. The fundamental updates this week showed a higher GDT index, solid March cheese exports for the US, and continued high production for dairy products.
Corn Higher on Week
- July corn futures managed to close 11.50 cents higher this week at $5.9650, while new crop futures finished up 7 cents at $5.3475.
- After an ugly end to April, the higher close and move off the recent lows gives the technicals some potential upside entering the heart of the growing season.
- Export demand remains sluggish for US product, however, and South American prices remain at a discount. US exports in March were down 34% YoY.
- Refinitiv cut Argentina’s corn crop by 1% to 34.6 million tons with harvest about 20% complete.
- The USDA will release its May WASDE report next Friday, May 12.
SBM Down for Third Straight Week
- July soybean meal futures were $6.30/ton lower this week with a close at $426.10. That is the lowest weekly close for the front month since late November.
- StoneX kept its estimate for the Brazilian soybean crop unchanged at 157.7 million tons; Brazil’s soybean exports were up 25% in April vs the same month last year.
- March soybean crush came in at a record for the month, totaling 197.97 million bushels. This is up from 192.87 mb in March 2022.
- US soybean exports in the month of March were down 2% YoY at 115 million bushels.
- Brazil’s harvest of its massive soybean crop continues to bring about problems with storage; domestic prices have tanked in recent weeks.
Friday’s Market Quotes
Author
Dustin Jonasson