Beef and Grain Can't Save Dairy Markets
THe USDA released its cattle on feed report on Friday with one surprise, and that in placements. 2.39 million head were placed in October compared to last year's 2.17 million head. That represents a 10% increase versus the average analyst guess of 7%. This may present greater head winds for beef prices as we head into spring and summer months.
Earlier this week grain prices broke through trend line support to establish new contract lows in corn. That changed dramatically on Friday as corn settled 6 cents higher on average with soybeans up roughly 18 cents in nearby contracts. Soybean meal followed through with a 7 1/2-dollar rise in prices out through next summer.
Such positive results were not witnessed in the dairy complex. Blocks dropped another 6 cents to $1.62, that was after a single load traded hands, which represented half of this week's volume - only two loads traded all week. The barrel market is right on its heals, dropping 3 cents to finish at $1.62 3/4 after five loads traded hands. Butter dropped 2 3/4 to $2.21 1/2, and grade A nonfat dry milk dropped 2 cents as well to finish at 72 1/2 cents. That move erased most all of this week's positive gains.
Class III markets continued their selloff from yesterday. The average for the first six months of 2018 now stands at $14.66, down 23 cents per cwt. Class IV markets drifted lower in the second half of the year but the first half remained unchanged at $14.39.