November 11, 2022
Strength In Class IV, Class III Mixed
Class IV futures rebounded from a sluggish start to finish the week, with two solid days of gains. Second month December contracts gained 16 cents on the week, while Q1 ’23 contracts were up 45 cents and Q2 contracts gained over 19 cents, settlements being $21.63, $20.88, and $20.79, respectively. Along with mixed settlements on Thursday and Friday, Class III futures were mixed overall on the week. December Class III contract gained $1.24 on the week, while Q1 and Q2 contracts were slight losers, settlements being $21.56, $20.57, and $20.31, respectively. The spot markets were finding active buyers with gains in cheese ($2.13125), powder ($1.43), and butter ($2.90); only whey ($0.44) was lower for the week. Next week will be a quiet week for fundamental reports; opportunities in supporting these recent gains will come from holiday demand and strong spot demand.
- Spot cheese gained nearly 14 cents per pound on the week, spot butter gained over 13 cents, powder up 3 cents, and whey down over 2 cents
- November 2022 Supply and Demand report raised 2022 milk production forecast and leaving 2023 unchanged; the price forecast for butter was raised, but was lowered for cheese and non-fat dry milk in 2023
- Grains were extremely volatile, the recent WASDE report was mildly bearish, pushing early week prices lower but rebounding to finish the week
- The Dollar Index fell sharply this week, losing over 450 points on the week, the largest drop in the market in recent years, settling below 107
Corn Under Strong Selling Pressure
- December corn futures saw four straight sessions lower before finding support on Friday, down 23 cents per bushel on the week to settle at $6.58
- USDA’s WASDE report was slightly bearish this week, raising production to 172.3 bpa and carryout to 1.182 billion bushels, but offsetting by increasing domestic usage
- Export numbers were unchanged on the WASDE, but remain well behind yearly expectations to this point
- Large gains in the equity markets were a likely catalyst for the losses in the commodities markets as managed money headed to stocks
- Russia and UN officials met Friday in attempts to extend the Ukraine grain export agreement
- Mexico doubles down on future bans as president Andres Manuel Lopez stated “we don’t want GMOs”
Soybean Meal Rebounds Friday, But Down For The Week
- December bean meal futures finished the week down $13 per ton to close at $407.40, with a high of $423.30 on the week
- November soybeans finished 4 cents higher on the week, but needed 25 cent gains on Friday to get there, settling at $14.555 on the week
- Brazilian farmers add to already huge planting acres with an additional 350,000 hectares, raising the crop estimate to a record 153.5 MMT, this came at the expense of corn acres
- This weeks WASDE raised soybean crop estimate 33 million bushels by increasing estimated yield 0.4 bushels to 50.2 bushels
- China eased some Covid regulations while some of their major cities had to step up their Covid lockdowns as cases surged
Friday’s Market Quotes
Author
Michael Minster