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.
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