This Week in Dairy 08-12-2022

August 12, 2022

 



Choppy Week for Milk Prices

Milk futures capped off a back-and-forth week with mostly red on the board as the September Class III price fell 30 cents to $19.80, but was still 50 cents higher on the week. Help came from spot cheese which garnered 7.75 cents to the topside to hurdle back above the $1.80/lb mark with a close at $1.86625/lb. Within the Class IV products, spot butter dropped 7.50 cents on the week to $2.9350/lb with powder up 1.50 cents overall, leading to a 19 cent drop for the second month September contract. Price direction remains lower for Class IV futures, while the Class III market is attempting to build a base after the recent selloff. The only fundamental update next week will be Tuesday’s Global Dairy Trade Auction, which has fallen nine out of the last ten events.

  • Front month corn pushed to a four-week high while front month soybean meal futures hit their highest point since mid-April
  • The weekly low for spot powder was more than 40 cents off the June high, but buyers defended the move beneath $1.50/lb
  • Front month live cattle futures are making a push to retest the seven-year high from February at $148.70


 

Corn Pushes to Four-Week High

  • September corn closed up 29.50 cents this week at $639.75 while December finished today at $642.25, up 32.25 cents this week
  • 14 ships have now left Ukraine in the last two weeks following the deal with Russia to resume grain exports
  • EU corn production is expected to hit a 15-year low as drought persists; Strategie Grains forecasts corn output at 55.4 million tons, down 15% from last month
  • Today’s August WASDE report pegged 2022/23 ending stocks at 1.388 billion bushels, down from 1.470 bb last month and compared to the pre-report estimate of 1.402 bb
  • The USDA estimated yield to be 175.4 bpa, down from 177.0 bpa last month and compared to the pre-report estimate of 175.9
  • World ending stocks came in at 306.68 million metric tons, down from 312.94 mmt in July and compared to the average estimate of 309.82 mmt


Soybean Meal Breaks Out of Range

  • September soybean meal futures closed the week $27.20/ton higher at $464.70, the highest front month weekly close since the beginning of April
  • China cut its expectations for soybean exports for the 2021/22 season due to loss demand to pig farms
  • Datagro in Brazil estimates the country’s planted acreage to rise to 43 million hectares in the season ahead with production estimated at 151.8 mmt, up 20% from this year
  • Today’s August WASDE report pegged 2022/23 ending stocks at 245 million bushels, up from 230 mb last month and compared to the pre-report estimate of 230 mb
  • The USDA estimated yield to be 51.9 bpa, up from 51.5 bpa last month and compared to the pre-report estimate of 51.1
  • World ending stocks came in at 101.41 million metric tons, up from 99.61 mmt in July and compared to the average estimate of 99.47 mmt


 

Friday’s Market Quotes

Author

Dustin Jonasson

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