August 19, 2022
Dairy Markets Stay Range Bound
Class III second month futures finished the week at $19.75, faltering after trading above $21.00 on Tuesday and lower than where it closed last Friday at $19.80. Class IV second month futures traded slightly higher on the week. After finishing last week on 8/12 at $23.18, the September contract settled at $23.50 today and is still trending higher after hitting a recent low of $22.60 on August 8th. Spot butter has not traded under $2.90/lb since June 1st; the market closed the week out at $2.94/lb with a weekly high of $2.99/lb. The block/barrel average started the week near $1.92/lb. and finished lower today at $1.8575/lb. The dairy markets have settled into these ranges recently with $20.00 for Class III and $23.00 for Class IV showing signs of technical support. Given there have not been any drastic changes fundamentally within the dairy market, this consolidation of prices will likely stick around under current market conditions.
- Butter continues heavy trading with 10 loads traded on the spot market today and totaling 48 loads traded on the week
- Bean meal finished the week lower with September futures falling $19.00/ton to $448.70
- Even though today’s close on December corn futures were up 7.5 cents, the week overall was lower. Today’s settlement on the December board was $6.2325/bu
Corn Stays in Channel
- September corn dropped 13.75 cents this week at $626.00; December futures fell 19.00 cents to $623.25
- The week began off with losses due to a storm system cutting through the southwest Corn Belt, which has suffered through a severe hot and dry period
- Brazil’s corn crop is expected to come in at 115.78 mmt, up 33% from last year’s poor production year; the most recent USDA estimate was 116.00 mmt
- China and Brazil have been working together to expand their agricultural trade; Brazilian corn exports are expected to begin to enter the country soon
- EU corn imports for the season beginning July 1st have hit 3.59 mmt, up from 1.78 mmt during that period in 2021 due to the drought
Soybean Meal Lower On Week
- September soybean meal futures finished the week with $16.00/ton in losses at $448.70; it holds more than a $40.00/ton premium over the October contract
- The weather forecast for the remainder of August looks largely non-threatening for the US
- Concerns surfaced about China’s demand for soybeans/soybean meal with improving weather and growing economic concerns
- It was announced China has stopped cattle imports from Australia and New Zealand due to foot-and-mouth disease concerns; those countries say that is untrue and shipments are clearing
- Overall, demand for US soybeans has been strong in recent weeks.
Friday’s Market Quotes
Author
Dustin Jonasson