Markets Reevaluated After Intense Focus On Trade and Tariffs
As the markets intense focus on the U.S. and Chinese trade negotiation and forthcoming tariffs was diminished in the last 24-hours, it allowed the market the opportunity to reevaluate some of the other things that have come to bear in the course of the last several days, namely the milk production report.
On Tuesday, the USDA released the main production numbers, which revealed that cow numbers, once again, have begun to grow. Across the entire United States, another 2,000 cows were added to the herd to bring it to 9.404 million head. Together, with an increase in productivity, milk production in the month of May rose by 0.8%, its second lowest increase, but nonetheless and increase. Total milk production was 19.1 billion pounds in the month of May.
While that did not send the markets drastically lower, prices maintained a softer tone, even after mixed results in the CME spot trade. Block cheese dropped a penny to fall to $1.49 and ½ cents on three trades while barrels rose 1 and ¾ cents on a whopping 34 loads. It finishes at $1.31 and brings the spread between blocks and barrels back to 18 and ½ cents. And while that is still wide, it brings Tuesday’s finish of 24 and 1/4 cents spread much closer to reality.
Grade A nonfat dry milk was up 1/4 cent to 77 cents. Butter finished 1/4 cent higher as well to finish at $2.29, however, it did not trade. Neither did whey which remained unchanged and finishes again at 39 cents. In the wake of all of this, Class III milk finished down 7 cents and it's average from now through the end of the year at a price of $15.67.