Lackluster Dairy Auction Results Sends Butter Prices Reeling

Butter futures took another trip south today spurred by dairy activity around the globe. Butter futures for September delivery are down $0.015 cents today currently trading at $0.236 per pound at the Chicago Board of Trade. While European dairy activity “appears” optimistic, the latest in a series of dismal GlobalDairyTrade actions in New Zealand suggests dairy prices are heading lower with butter futures leading the way. Although whole milk powder rose nearly 2% recently, the products that are made with it have seen losses. Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the butter futures market by stating, “The butter (futures) market was believed to be strong because of the strength of the European market and the reasonable demand for butter and cheese.” Craney adds, “In other areas of the world, such as on the Asian continent, the weak demand is helping to shift prices lower.” The trend for butter futures has been sideways to down at best since a significant rally in mid-June. What butter futures prices are doing to the dairy farmer may be a boon to us consumers. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...

With Dairy Outlook Quiet, Milk Futures Still Rally

Milk futures have extended their gains from the April 14th low, however overall dairy activity has not mirrored the action. Milk futures for June delivery was up .04 cents today trading at $14.02 (per cwt) at the Chicago Mercantile Exchange. Along with milk futures, whole milk powder prices have been up 7.5% to their highest levels in three months, while skimmed milk powder has only rose 0.3% – cheddar cheese actually falling by nearly 4%. Production in New Zealand – the world’s top dairy exporter – remains robust despite most farmers there operating “in the red.” Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the milk futures market by stating, “Milk futures, however accelerating solely from overall dairy futures, shouldn’t be looked into much.” Bourbeau adds, “Global dairy markets may remain under heavy production, but we’re understanding overall demand is rather sluggish.” The trend for milk futures is “up” from the overall picture March lows, but barely. I expect milk futures to test its March lows or continue with the overall downtrend should the $13.50 support area become compromised. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...

Milk Futures May be Finding a Low Soon

Milk futures have been steadily dropping since October of 2014, but if an industry titan is correct milk prices may be correcting for the remainder of the first half of this year – but nothing of significant amounts. Milk futures are down .14 cents today currently trading at $13.50 per cwt at the Chicago Mercantile Exchange. An executive at the biggest domestic dairy processor claims the expected slight recovery in milk prices are due to demand shown in European production despite Russian limited purchases while imposing sanctions on China and other Western exporting countries. European milk production is reportedly running 150% more than US production and 700% more than New Zealand’s production (the top milk-exporting nation). “The supply and demand factor in this milk production situation may be a temporary circumstance,” said Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, sharing her fundamental assessment of the milk futures market. Bourbeau added, “Milk futures bigger picture still shows enough supply, but when Russia opens there doors once again for milk imports that may add to the demand outlook.” The trend for milk futures remains down with no bottom yet in sight (in my study). In fact, my work shows solid support in milk futures from December & January taken out just this week. Does the milk executive know something that the market doesn’t expect? ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR...

Chinese Economy Weighing on Int’l Dairy Futures

Milk futures and other dairy products are lower from the Global Dairy Trade Auction on the outlook of the Chinese economic slowdown. Milk futures (Feb) are currently down .45 cents (per CWT) trading at $13.73 at the Chicago Mercantile Exchange. Every two weeks these auctions are held in the biggest dairy product producing nation (New Zealand) serving much of Asia and Oceania. The most current auction saw prices down 1.4% than the prior event two weeks ago, and is now being perceives as possible demand outlook uncertainty. “When your biggest customer is ordering less dairy products, it is a pretty good barometer of the economic health of that nation,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental assessment of the dairy futures market. Evans added, “Dairy products are still in demand around the globe, but what we may be seeing here is a demonstration of fair value in (dairy price) discovery.” The trend for milk futures is clearly down since October, but at a possible crossroads. If milk futures continues with higher highs tomorrow it can possibly change the near-term trend outlook to up. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...

Dairy Price Revival Dampens with Strong Production: Milk Futures

Milk futures are forecasted to remain weak until late next year as long as strong milk production continues in the EU – putting a damper on any revival in the dairy markets. Milk futures are down .05 cents from last week’s close, currently trading at $14.52 per CWT at the Chicago Mercantile Exchange. A prominent Dutch agri-bank forecasts whole milk powder will not return to $3,000 per ton until late next year. It was just October of 2014 when milk prices were at their height of $24.50 per CWT (which translates to $2,450 per ton on the American market). Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the milk futures market by stating, “Much of this downturn on milk (futures) prices may be from China previously hoarding milk, to now dwindling down their supplies.” Levy adds, “They are learning what was popular in the USA in the 70’s with stretching supplies with dry milk powder – a fast faded trend.” The trend for milk futures is down with no bottom yet in sight. Milk futures may be providing a gift for young families with hefty milk drinkers, so enjoy these low prices while we can. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...

Lack of Global Demand May Keep Milk Futures Depressed

Milk futures prices may have farther down to go well into 2016 as a food group organization views weak demand from China & Russia being the main catalyst for this opinion. Milk futures are down .09 cents today currently trading at $15.70 per CWT at the Chicago Mercantile Exchange. Weakness in the milk industry had been anticipated, however now milk prices are expected to last longer than previously anticipated due to the extension of a temporary Russian ban (on EU-imports) and the stock market situation in China. On the other hand, this last quarter is reported to have seen an uptick in global dairy demand from an August low, but nothing to get excited about. “The global diary milk (futures) setback should not be viewed longer-term in nature,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental assessment of the milk futures market. Evans adds, “What is driving the dairy milk (futures) depression in Asia & Russia is a temporary situation. Just a matter of time until the dairy farmers hold back output as we have seen in the past.” Milk futures trend has been down overall since June, however in a temporary sideways pattern since mid-September. If the food group’s prediction is correct (about milk futures), then consumers should benefit from lower dairy prices well into next year. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF...