August 4, 2020

Dairy Markets Take Another Blood Bath

 |  By: Know Your Market

A vast swath of red filled the CME markets on Tuesday as traders hit the sell button. The dairy complex felt the greatest pain starting with the spot dairy auction losing 15.5 cents on butter, following 25 trades, blocks dropped 14 ¾ as 13 loads moved, and barrels suffered a 20.5 cent decline with 5 trades taking place. Butter closed at $1.42 ½, blocks at $1.93, and barrels at $1.81 ½ per lb. respectively. Grade A nonfat dry milk softened 2 cents while whey was unchanged. 

The softer product trade followed GDT event 265 where the overall index dropped 5.1%. Products gaining in value included anhydrous milk fat and lactose. Butter was down 2.8% to $1.52 per lb. Cheddar retreated 5.3% and ended up at $1.62, skim milk powder lost 4.6% to $1.17, and whole milk powder settled out at $1.35 per lb., down 7.5% in the session. 

Class III milk markets were beat up hard following product trade. August collapsed $1.10, September lost the limit of $1.50 per cwt, and October was down 90 cents per cwt.  Unfortunately, the pain inflicted didn’t stop there with November off 50 cents and December through most of 2021 10-30 cents lower. Class IV markets were down 40-60 cents in 2020. 

Grains watched corn fall 8 cents to a new contract low of $3.20 per bu. Soybeans lost 14.5 to $8.81 ¾ while the wheat complex ranged from 4-12 cents in the red.