USDA Purchases 120 Million In Dairy Products, Markets Race Higher
Class III and IV priced raced higher after news hit that USDA was making section 32 purchases. 120 million of the 470 million purchase will go to dairy products.
Class III months jumped 75 cents between June and October 2020. November and December were up 60 and 50 cents as well, respectively. First quarter 2021 add 14-34 cents. Class IV markets rose 9-40 cents per cwt. June through December 2020 as well. $16.00 milk has now reappeared to dairy producers in Q4 2020 in the Class III market. After today, that quarter will be sitting at prices not seen since March.
CME spot product markets closed today’s session higher across the board. Cheddar blocks and butter add3/4 of a cent with blocks trading three times. Butter ended at $1.19 and a half while blocks were at $1.21 and a quarter. Barrels jumped 4 cent to $1.23 per lb. Grade A nonfat dry milk added 1 and a quarter cent while dry whey moved a quarter cent higher to 39 and three-quarter cents per lb.
The grain sector didn’t perform nearly as well as President Trump hinted at potential tariffs against China because of economic harm due to COVID-19 outbreak. Corn softened 3 cents, soybeans were off 12 and wheat was slightly higher.