This Week in Dairy 09-18-2020

September 18, 2020

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Milk futures ended the week on a high note despite some volatility throughout the week. On Friday, the October class III milk contract (currently the second month contract) gained 53c to post a weekly close of $19.57. This keeps the weekly up streak alive, putting it in the green by 36c this week. It has now been four weeks in a row of green prices for October class III. The class IV milk market also had a strong finish to the week with the October contract posting a limit up day on Friday. The reason for the rallying milk futures links back to the spot dairy market. Demand has been steady to strong in recent sessions. This buying demand may stem from the fact that the government announced another $1 billion of product purchases.


  • The market expects cheese demand to be strong in the near term with more government buying
  • Butter futures posted a limit up day on Friday as a result of strong spot market demand
  • October class III milk is back up over $19.50 per hundredweight
  • The 2021 class III milk market continues to trend upwards


Corn futures had yet another strong week of trade, gaining 10c and moving higher for the fifth week out of the past six. The rally now brings the December contract up to $3.7850 per bushel, which is its highest weekly close since the week of March 7th. It is impressive to see corn rally through farmer selling like this. Good weather for harvest is likely keeping farmers active while making sales into the rally. There also continues to be a good amount of China buying of U.S. products, as well as from “unknown destinations”. The market will watch for Monday’s Crop Progress report put out by the USDA to see how harvest progress is coming along.


  • Corn futures put in their highest weekly close since March 7th
  • China has been a strong buyer of U.S. grains in recent weeks
  • Some resistance may be in the form of farmer selling, as good weather allows for harvesting
  • Outside support from a roaring soybean market is helping to fuel the corn bulls

Soybean Meal

Soybean meal futures shot higher this week with the December contract adding a whopping $17.50 per ton. It’s closing price came in at $342.10, which is the contract’s highest weekly close since February of 2018. This was the fifth up week for soybean meal out of the past six weeks. Support came from soybeans and the fact that the November contract added 47.50c in total this week. Talk that the $13 billion farm stimulus package could ease producer selling in the short term helped fuel the bulls. However, the market conditions for the soybean complex lean overbought so caution should be taken moving forward. A technical pullback could be on the way.


  • USDA put the 2020 soybean yield estimate at 51.90 bushels per acre in the September report
  • China was a strong buyer of U.S. soybeans again this week
  • The soybean complex leans overbought at this time and could be due for a correction
  • Soybean meal closed above strong resistance of the March high on Friday

Market Quotes


Evan Disher

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