This Week In Dairy 10-28-2022

October 28, 2022


Heavy Pressure on Dairy Prices

The lack of fundamental news this week led to dairy prices following the path of least resistance lower. Class III prices took a major hit this week with second month November prices dropping from a high of $21.30 to close out Friday trade at $20.21. The $20 level on second month Class III has been both resistance and support multiple times over the last two years, more often than not this price had worked as resistance so a close below could set a trend of milk prices below $20. Class IV prices moved lower this week as well but fared much better than its Class III counterpart. Second month November fell from $23.88 to $23.65. The only major spot market to close higher this week was powder, gaining a single penny on the week to settle at $1.43/lb. The spot cheese market was a significant loser on the week, starting the week at $2.06/lb. and closing Friday’s spot session at $1.9425/lb. Butter lost 5 cents on the week to settle Friday’s trade at $3.14/lb., while whey continues to trend sideways to finish the week a penny lower at $0.43/lb.  

  • Front month heating oil futures continue its recent strength as diesel supplies are worrisome and cold weather starts to fall on the Northern Hemisphere
  • Front month live cattle futures continue to be extremely strong as recent Cattle on Feed reported bullish numbers, settling at $153 to end the week
  • US weekly cow culling from the dairy sector was down 2.2% YOY for the week of October 15
  • Although down significantly from recent highs, the US dollar index has found support over $110, this same level acted as support at the beginning of the month


Corn Action Still Sideways

  • December corn continued to trend sideways for a second straight week, facing resistance against the 15-day moving average, closing today at $6.8075
  • National corn basis is the strongest in 10 years while Export basis is historically low because of the low water levels on the Mississippi River
  • The deputy ag minister in Mexico stated that the country will proceed with a ban on GMO corn imports by 2024
  • US corn export commitment is well below a year ago – USDA will likely lower the export number and raise the carryout on the November report
  • China’s internal corn price is around the equivalent of $10.08 per bushel

Soybean Meal Hanging Near Support

  • December bean meal jumped higher on Friday’s trade, breaking a week-long sideways trend, to gain $10 per ton to settle at $425.40
  • Support was found on the 100 and 200-day moving averages which both reside above the $400 mark that had acted as support recently
  • Decent export numbers on soybeans and a softened tone from President Xi in China have given support to current prices
  • Bean oil seems to be the driver of the bean complex as prices ran up the last few weeks on bio-diesel hopes of additional blending, palm oil futures, however, fell about 4% on Friday’s trade
  • There is concern about soybean export demand, despite the fact that export commitments to date are above last year


Friday’s Market Quotes


Michael Minster

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