August 5, 2022
Dairy Markets Finish the Week Lower Overall
Both Class III and IV milk second month futures contracts started the week higher but finished lower. Milk and cheese supplies seem to be abundant in many places with the only shortage in the market appearing to be butter, with inventories down 20% from a year ago. The spot market has held over $3/lb this week. The downward march of the GDT coming off historical highs continued this week with the GDT down another 5%. The GDT price index has closed lower in 9 out of the last 10 auctions. Some support to the dairy markets could come in the form of government buying and schools getting back in session. There were reports of the US government buying fluid milk for the 4th quarter for distribution through domestic feeding programs. Nearly 1.5 million gallons purchased already with more to come.
- US whey stocks have fallen two straight months along with spot prices
- Eleven offers for butter were present on Friday in the spot trade but found no buyers
- With July now settled, August is the front month contract and September moves into the second month spot
- US spot cheese is down over 60c from the May 2022 highs
Corn Holds $6.00 Support Into Week’s End
- Corn buyers have supported the market higher over the past two weeks, pushing corn back over the $6.00 threshold
- December corn finished down 10c this week to $6.10 per bushel, which is up 22.50c from this week’s low
- The eastern Corn Belt is expected to be mostly dry for 2 weeks following this weekend’s expected rains
- France saw a record July drought that could affect world corn production outlook
- Crop tours are making their way across the US and there have been a few private corn yield estimates below the USDA’s 177 bpa estimate
- There will be a USDA Supply and Demand report next week Friday
Soybean Meal’s Consolidation Trade Continues
- The soybean meal trade has been extremely volatile in recent sessions; The September contract gained $22.10 on Thursday and then fell $16.00 on Friday; For the week, the market fell $4.90 to $437.50
- China has been back in the market for US soybeans, which has supported a higher trade
- Most private soybean yield estimates are in line with the USDA’s 51.50 bushel per acre estimate
- Tensions with China have escalated after the visit by Nancy Pelosi which is making soybean traders nervous
Friday’s Market Quotes
Author
Evan Disher