Mielke Market Weekly

MIELKE, from pg. 14

29 cents below that week a year ago.

The barrels finished Feb. 5 at $1.50 per pound, up 11 cents on the week, 2.25 cents above a year ago, and reduced the spread to 14 cents. Nineteen cars of block were traded on the week at the CME and 14 of barrel.

StoneX Dairy’s Feb. 5 “Early Morning Update” stated, “With uncertain government purchases and the potential for increased food service business in the coming months, it seems 0.5 percent cheese production growth (Dairy Products report) is not enough to give cheese buyers peace of mind.”

Cheese contacts tell Dairy Market News that spot milk offers were quieter than in recent weeks, but far from tight. Prices for spot milk remain at strong discounts. Cheese production is busy as managers keep ahead of the milk by producing cheeses that require aging.

Winter weather hit the Northeast and added stress for Midwestern cheese producers who provide for restaurants which will not be able to offer outdoor dining for the near term. Dairy Market News says, “There are a myriad of questions regarding near and long-term market conditions, as contacts’ outlooks are foggy.”

Western cheese is widely available and inventories are growing for most varieties as cheese output also tries to keep pace with the available milk. Cheese supplies are outpacing demand as retail sales decreased following the holidays and pizza cheese demand has eased some with the football season ending. The Super Bowl is characteristically the biggest cheese-selling time of the year, and hopefully that’s still the case. Food service demand has yet to see much improvement — even as some areas relax Covid restrictions on restaurants. Dairy Market News says, “Government purchases can help clean up some of the cheese stocks; but market observers are also wary of the impact that additional purchases can have on price volatility.” n

Butter dropped 3.5 cents on Feb. 1 to $1.21 per pound (the lowest since May 5) but jumped 8.25 cents the next day, spurred by the GDT, and ended Feb. 5 at $1.2675. This is up 2.25 cents on the week, but 56.5 cents below a year ago, on 23 sales.

Cream prices remain within reach for butter makers in the Central region, says Dairy Market News, but steadily growing ice cream production has some contacts reporting slight upticks on the multiples. Plant managers have said they are using primarily internally sourced cream, which is abundant.

Butter production remains busy, although food service demand is “a shell of its pre-Covid-19 self,” says Dairy Market News. But retail demand has covered some of the lost ground.

A few producers report February has picked up some steam regarding bulk butter sales. Dairy Market News stated, “There are only a few weeks of old crop butter trading left on the CME, which typically offers at least a short-term bullish shift.”

Western cream supplies are increasing seasonally and churns are on full schedules in many cases. Butter inventories are adequate for some, but heavier than anticipated for others, though domestic butter demand is described as good.

Grade A nonfat dry milk fell to $1.09 per pound on Feb. 4 (the lowest since Nov. 24) but saw a Feb. 5 finish at $1.12. This is down 5.25 cents on the week and 13 cents below a year ago. A whopping 60 carloads exchanged hands on the week, including a single day record of 33 on Feb. 3.

Virtual dairy beef short course March 23

The I-29 Moo University Collaboration’s 7th annual Dairy Beef Short Course will held on March 23. Due to Covid-19 it will be offered as a webinar. There will be a morning session from 10 a.m. to noon, followed by the afternoon session from 1 p.m. until 3 p.m

“Presenters at this year’s Dairy Beef Short Course are industry leaders who will provide insight into factors influencing dairy beef performance along with looking at the future of dairy beef production from a consumer and economic perspective,” said Tracey Erickson, South Dakota State University.

The morning speakers include Tara Felix, Penn State University discussing the role of nutrition and implants in dairy beef performance and Phil Durst, Michigan State University discussing how employee management influences animal performance.

In the afternoon, Bill Halfman from University of Wisconsin will present the performance factors influencing profitability and Lisa Scebbi from JBS US will talk about taking advantage of future consumer trends to optimize market opportunities for dairy beef.

To register, go to https://tinyurl.com/y8t3puur. The registration fee is $25 and will be payable on-line. Webinar links will be sent by email before the event. An electronic copy of the proceedings will also be emailed to participants at the conclusion of the webinar along with access to the recordings of the two sessions.

For more information, go to https://dairy.unl.edu/i29-moo-university or contact Tracey Erickson at (605) 882-5140 or tracey.erickson@sdstate.edu; or Fred Hall at (712) 737-4230 or fredhall@iastate.edu.

This article was submitted by University of Minnesota Extension. v

StoneX says, “The conventional wisdom this year is that the slack in domestic powder demand was balanced by strong global markets. That dynamic likely still exists, but we do wonder if price weakness, even modest price weakness, on nonfat dry milk will increase domestic usage. With plenty of fluid milk available we don’t expect to hear about fortifying the cheese vats now, but maybe there is an attraction to the storability of powder.”

Dry whey held all week at 53.5 cents per pound, 14.5 cents above a year ago, with just one sale reported on the week at the CME. n

See MIELKE, pg. 18

Grain Outlook Corn export business is booming Livestock Angles Feed costs keep livestock market in ‘wait and see’ mode

The following marketing has purchased 17.7 mmt of As we ended the month of markets remain firm and finanalysis is for the week end- U.S. corn thus far in the mar- January, the livestock mar- ished cattle prices weaken, ing Feb. 5. keting year. With Dalian kets were mostly in the pro- look for the feeder market to

CORN — Rationing, what Exchange corn prices cess of reversing direction also suffer price deteriorarationing? March corn made approaching $11 per bushel it from higher to lower. Both the tion in the coming weeks. The new contract highs in five of still works for them to buy live cattle futures and the hog cattle complex is definitely at the last eight trading ses- U.S. corn. In their daily export futures experienced weekly a crossroads at the present sions. Nearby corn closed over sales flashes this week, we reversals, while the feeder time and the next several $5.50 per bushel for the first sold 17.8 million bushels of cattle futures were lower for weeks will determine the time since July 2013. The new PHYLLIS NYSTROM corn with 4.3 million to Japan, the day on Jan. 29; but well JOE TEALE direction going into the contract high in March corn CHS Hedging inC. 9.5 million to Mexico, and 4 off the highs for the week.This Broker spring. St. Pis $5.58 per bushel. China hasn’t been the only one to increase U.S. corn purchases this year. Mexico’s purchases are up 12 peraul million bushels to unknown. The Buenos Aires Grain Exchange dropped their Argentine corn production 1 mmt to 46 Great Plains Commodity Afton, Minn. leaves the suspicion that the livestock markets could be looking at the possibility over lower markets in the weeks ahead. The hog market appears to be in a similar situation as the cattle market. The futures market in hogs experienced a reversal cent year-on-year at 75 percent of what mmt. They put 10 percent of the There has been a significant change down on the last week of January. The they bought the previous year (and Argentine corn crop in the poor/very the boxed beef trade in the past couple pork product has declined in volume, only five months into the marketing poor category, up from 8 percent the of weeks which suggests lower prices like the beef, over the past several year). Japan has already bought 72 previous week. The U.S. attaché in paid for live inventory of cattle may be weeks. percent of the total they bought in all of 2019-20. Mexico is talking about cutting corn imports by 1.5 million metric tons this year to 15 mmt and reducing them by 30 percent over the next three years. This would be accomplished by increasing domestic production. Most of their yellow corn imports come from the United States and are used for livestock. Weekly ethanol production was up 3,000 barrels per day to 936,000 bpd. Ethanol stocks were up 714,000 barrels at 24.32 million barrels, the highest in See NYSTROM, pg. 17 Brazil lowered their corn production forecast from 107 mmt to 105 mmt. The USDA’s January outlook was 109 mmt. The average trade guesses for the Feb. 9 World Agriculture Supply and Demand Estimates report are as follows: U.S. ending stocks 1.392 billion bushels vs. 1.552 billion bushels in January. World ending stocks 279.79 mmt vs. 283.83 mmt in January. Argentina’s corn production is expected at 47 mmt, down .5 mmt from January and Brazil’s corn production at 108.4 mmt vs. 109 mmt last month. nearing a top. The volume in the choice and select grades of the boxes has dropped off as the price of each category has gone up. This could indicate demand might be slowing because of the higher prices. The export market has been pretty good which has assisted in the recent strength in the cattle market. However, as prices have risen, the question becomes will that sector also slow down as well? The feeder market also appears to be questionable as grain prices continue to remain strong. However, if the grain The good news has been the export market which has propped up the cash price paid for live inventory during the past couple of months. The decline in the cold storage of pork has dropped significantly this past few months which has also bolstered prices. The caveat would be as prices rise, demand tends to weaken. Considering the price rise we have seen lately, the market could be vulnerable to some corrective action. The next few weeks will likely give a perspective of which way hog prices will go into the spring months. v 39 weeks and a record for this date. Margins fell a penny to a negative 5 cents per gallon. Gasoline demand continues to run 11 percent behind last Cash Grain Markets year over the last eight weeks. Weekly export sales were a weekly St. Cloud corn/change* $5.12 +.28 soybeans/change* $13.32 +.32 For marketing record at 292.8 million bushels which was expected after last week’s fantastic Madison Redwood Falls $5.16 $5.24 +.27 +.26 $13.42 $13.47 +.36 +.37 news between sales to China. Total export commitments at 2.2 billion bushels are 87 percent of the U.S. Department of Agriculture’s projected 2.55 billion bushels just five months into the marFergus Falls Morris Tracy Average: $5.14 +.30 $5.16 +.26 $5.11 +.29 $5.16 $13.22 +.32 $13.32 +.36 $13.32 +.37 $13.38 issues ... visit www.TheLand keting year. We need to average just 10.2 million of sales per week to reach the target. We have shipped 31 percent Year Ago Average: $3.52 $8.14 Grain prices are effective cash close on Feb. 9. Online.com of the USDA’s export forecast. China *Cash grain price change represents a two-week period.