November 18, 2022
Dairy Markets Starting to Sour?
There was little to get excited about in today’s dairy trade. Spot butter traded lower 13 cents on the day to $2.81/lb, wiping away gains from earlier in the week. Spot whey was unchanged at $0.44/lb the entire week on minimal trading. Spot cheese was mixed, down over 5 cents on the week to settle at $2.08/lb, blocks were higher on the week but brought down by the heavy selling pressure of barrels, which were down over 13 cents on the week. Spot powder was lower by just over two cents on the week to settle at $1.4275/lb. With the negative spot trade and very little fundamental news, Class III second month contracts were down a nickel on the week to $21.53, while the 2023 average was down over 12 cents on the week to $20.267. Class IV second month futures were down significantly on Friday, losing 45 cents, and although the contract was still up 7 cents on the week, the selling pressure on Friday wiped away strong gains from Tuesday and Wednesday’s trade.
- There will be plenty of action early in the week for fundamental trading: October Milk Production and Dairy Products Production on Monday, October Cold Storage numbers on Tuesday
- Grains continued sideways this week: December corn continued to stay rangebound, up 10 cents to $6.6775, while January beans lost a dime this week and settled at $14.2825
- Government buying posted late Friday: American Agriculture Feeds Kids and Families Acquisition will be in the market for roughly 2 million lbs of cheese and an unspecified amount of liquid milk
- US weekly dairy cow culling for week ending November 5 was +0.2% YoY
Corn Stops The Bleeding This Week
- December corn futures traded to almost a three-month low this week at $6.5175 but closed Friday at $6.6775, up about a dime
- Export sales improved drastically this week to 45.9 million bushels, the largest of the marketing year
- Ethanol stocks have hit their lowest level since December 2021 with production last week at 1.011 million barrels per day
- The National Weather Service estimates the Mississippi River could rise 9 feet over the next week and a half, easing the recent barge issues
- The USDA Foreign Ag Service estimates Ukraine’s 2022/23 crop at 25.8 million metric tons, down from the current USDA estimate of 31.5 mmt
Soybean Meal Holds $400 Again
- December bean meal futures were $3.00/ton higher on the week to close at $410.40
- Long-term support continues to hold for front month futures around the $400.00 area
- Brazil is expected to plant 850,000 more soybean acres than previously estimate, causing CONAB to raise their crop estimate 1.2 mmt to 153.5 mmt
- Through October, China imported 73.18 tons of soybeans from all countries, down 7.4% from the same period on 2021
- Export sales for the week were an impressive 111.3 million bushels, the fourth-largest weekly total this calendar year
Friday’s Market Quotes
Author
Dustin Jonasson