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?
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