milk
February 24, 2020

Coronavirus Spreads, Wallops Commodity Markets

 |  By: Know Your Market

A broad-based commodity sell off was witnessed to begin the week on Monday as the spread of coronavirus continued in China but also to other countries as well. Corn fell 4 and a half cents; soybeans were down 16 and a half and the wheat complex softened 10-17 cents. Cattle futures closed limit down in fats and feeders while lean hogs dropped $2.40 per cwt. Crude oil lost $2 and diesel was off 7 and a half cents per gallon. 

Over in the dairy complex, results were similar despite no volume being traded in the CME spot dairy session. Butter and Grade A nonfat dry milk were the lone products to change in volume, softening 1 and three-quarter cents and 3 cents per lb., respectively. Butter settled at $1.73 and three-quarter cents per lb. and nonfat dry milk at $1.14. Dry whey closed at 37 cents per lb., blocks at $1.76 and three-quarter cents, and barrels at $1.59 per lb. 

Class III and IV markets fell just like all other commodities. Prices declined 3-13 cents per cwt. in March through December in Class III while Class IV markets were walloped another 18-40 cents per cwt.

The USDA released it’s January cold storage report on Monday with butter inventory totaling 243 million, which was right in line with expectations and 32 million lbs. higher than last year. Cheese inventories were higher than expectations as total natural cheese in storage was reported at 1.35 billion. The cold storage report is price neutral for butter and bearish for cheese.