This Week In Dairy 12-23-2022

December 23, 2022

 



Mostly Lower Trade This Week

The positives for this week lie mainly on the Class III side with cheese gaining a dime, the January contract closing 81 cents off the weekly low for a gain of 22 cents, and the February contract leaving a nice tail off its low as well. Outside of that, the deferred Class III milk contracts and the Class IV complex gave up value and struggle to find a footing. Monday’s Milk Production report was devoid of any major surprises, Tuesday’s Global Dairy Trade was negative, and yesterday’s Cold Storage report was uneventful. Arguably, the biggest risk to the dairy market at the moment is a lessening of demand for US export products.

  • November milk production in all 50 states totaled 18.3 billion lbs, up 1.3% YoY
  • Cow numbers have been level for most of 2022 but are running above last year, coming in at 9.420 million head in November 2022 vs. 9.382 million a year ago
  • Compared to a year prior, cheese in cold storage was up 1% and butter in cold storage was down 5%
  • Spot butter is down 53 cents for the month of December so far, closing today at $2.3950/lb


 

Corn Market Edges Higher

  • March corn futures closed the week 13.25 cents higher at $6.6625
  • Heading into the holiday, it was a rough week for corn export and ethanol demand, a trend aided by the severe weather
  • Brazil remains cheaper than US corn, but the drop in corn futures and the US dollar has helped bridge the gap a bit
  • The EU cut their 2022 corn crop estimate again to 52.1 million metric tons, down 29% from last year


Soybean Meal Lower for Second Week

  • March soybean meal futures finished the week with losses of $8.90/ton with a $451.30 close on Friday
  • Of the 876,000 tons of soybeans exported in the week ending 12/15, China purchased 551,000 tons of them (63%)
  • For the month of November, however, US soybean exports to China were down 7% YoY
  • Brazil’s soybean crop is expected to be a record high 5.6 billion bushels with current weather forecasts friendly; Argentina is a different story as they continue to fight drought
  • Front month soybeans and soybean meal recently failed near 4-month highs, peaking near $15.00/bushel and $470.00/ton, respectively


 

Friday’s Market Quotes

Author

Dustin Jonasson

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