AlHancMtef Farming, Saturday, January 22, 2000
GRAIN. CATTLE, HOG,
& MILK BFP
FUTURES MARKETS
Markets Courtesy of Chicago Board and Mercantile Exchange
Closing Bids: Thursday, January 20,2000
Com
Daily Prices As of
Symbol;C
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
01/20/00
Total
01/19/00
Soybeans
Daily Prices As of
Symbol:S
01/20/00 MAR 00
01/20/00 MAY 00
01/20/00 JUL 00
01/20/00 AUG 00
01/20/00 SEP 00
01/20/00 NOV 00
01/20/00 JAN 01
01/20/00 MAR 01
01/20/00 JUL 01
01/20/00 NOV 01
Total
01/19/00
Weekly Dairy Market Outlook
By Ken Bailey
Penn State University
January 14,2000
Cheese prices at the Chicago
Mercantile Exchange remained
relatively stable this week. Prices
for 40-pound blocks were $l.lO
per pound on Monday, January
10, rose to $1.1325 on Thursday,
January 13, and fell to $1.1250
the next day. Barrel cheese prices
remained steady this week at
$1.1025 per pound.
USDA reports that cheese
production remains seasonally
heavy and that food service
promotions are strong. Other than
that, there hasn’t been any new
information for the markets to
react to. Prices may move next
week, however, when the milk
production report (January 18)
and the cold storage report
(January 21) are released The
latter will reveal November and
December butter and cheese stock
numbers.
What was surprising this week
was the strength in butter prices.
Grade AA butter at the Chicago
Mercantile Exchange rose from
$0.89 per pound on Monday to
$0,965 by Friday. According to
USDA, “many butter producers
and handlers are puzzled by the
recent price firmness recorded at
the CME.” USDA further
reported that churning activity is
heavy, stocks of fresh butter are
ample, and demand is just fair.
The markets for dry dairy
products continues to languish.
The government purchased
10.881 million pounds of
nonfortified nonfat dry milk and
925,764 pounds of fortified
- Thursday, 20 January
Open High
2202 2214
2280 2294
2354 2370
2430 2432
2480 2480
2504 2514
2534 2534
2580 2584
2640 2644
2584 2594
2600 2600
Volume Open_lnt
55826 465934
- Thursday, 20 January
High
5066
5152
5240
5254
5270
5350
5410
5464
5530
5524
Open
5004
5090
5174
5200
5220
5286
5340
5400
5460
5524
Volume Open_lnt
50506 148995
nonfat dry milk from Western and
Midwestern sources. USDA
reports that some producers are
selling powder at $1 per pound,
below support price levels. In
addition, prices for dry buttermilk
are also depressed due to strong
cheese production.
The good news is that demand
for dairy products last year was
strong. USDA reported in Dairy
Market News that commercial
disappearance of dairy products
during the first 10 months of 1999
totaled 136.6 billion pounds, up
2 4 percent over the same period a
year ago. I’m particularly
interested in the level of cheese
disappearance during the last
quarter of 1999 We should know
these numbers in a month or two.
My forecasts for the year are in
Table 3 below. I started with a
forecast of commodity prices.
From there I projected component
prices and class prices. If you
have access to the internet, you
can download this model from the
following URL.
http://www.aers.psu edu/dairyoutl
ook/excel.htm.
I compared my Class 111 price
forecast with the Chicago
Mercantile Exchange <BFP milk
futures (also a Class 111 price) as
of January 14, 2000. There are
similarities for the first six
months of 2000. But I expect
market prices to strengthen the
last six months of the year.
For dairy producers, there is
little incentive to hedge or
forward contract milk at this time
as the futures markets have a
bleak outlook. At this time there
is greater upside potential for
these numbers. A better strategy
would be to wait. If in the weeks
Chge
unch
unch
unch
-4
-4
-4
-4
unch
-4
unch
Low
4974
5062
5150
5174
5190
5262
5340
5400
5460
5480
Cheese
500 lb. Barrels 1/ 1.1415
40-lb. blocks 1.1675
Butter 0.8545
Nonfat dry milk 1.0112
Dry whey 0.1887
Source- Dairy Product Prices, NASS. USDA
(http://usda. mannhb. Cornell, edu/reports/nassr/price/dairy/1999/)
1/ Adjusted to 39% moisture.
aheadon futures prices rise above
the $ll level for February
through April contracts, one may
want to hedge a small part of their
milk supply (no more than 25
percent).
For more information on dairy
outlook and federal order reform,
see my web site at:
http://www.aers.psu.edu/dairyoutl
ook/
Commodity Prices Mixed
Lean Hogs
Daily Prices As of Thursday, 20 January
Date
01/20/00 Feb 00
01/20/00 Apr 00
01/20/00 Jun 00
01/20/00 Jul 00
01/20/00 Aug 00
01/20/00 Oct 00
01/20/00 Dec 00
01/20/00 Feb 01
01/20/00 Apr 01
Composite Volume
01/19/00 11263
Live Cattle
Daily Prices As ofThursday, 20 January
Date
01/20/00
01/20/00
01/20/00
01/2 0/00
01/20/00
01/20/00
01/20/00
Composite Volume Openjnt
01/19/00 19887 134938
Table 1. Chicago Mercantile Exchange Prices, Weekly Averages
14-Jan-OO 7-Jan-00 31-Dec-99
Cheese;
500 lb. barrels
40-lb. blocks
Nonfat dry milk:
Extra Grade
Grade A
Butter:
Grade AA 0.9367
Source: Dairy Market News, AMS, USDA
(http://www.ams.usda.gov/dairy/mncs/weekly.htm).
Table 2. NASS Weekly U.S. Average Survey Prices
Cheese prices at CME
stable
Butter prices at CME up
Futures market prices
remain depressed
Open High
5615 5637
5910 5930
6650 6690
6540 6575
6290 6317
5850 5887
5637 5680
5800 5805
0 5690
Open_lnt
48340
Open High
6990
7190
6950
7020
7237
7342
7435
Feb 00
Apr 00
Jun 00
Aug 00
Oct 00
Dec 00
Feb 01
Oats
Daily Prices As ofThursday, 20 January
Symbol;O
01/20/00 MAR 00
01/20/00 MAY 00
01/20/00 JUL 00
01/20/00 SEP 00
01/20/00 DEC 00
01/20/00 MAR 01
Total
01/19/00
1.1025 1.1500 1.1563
1.1150 1.1760 1.1675
1.0300 1.0300 1.0300
1.0300 1.0300 1.0300
8-Jan-99 I-Jan-00 25-Dec-99
NASS Survey Prices
Date Cheese NFDM Butter
Jan-00 1.1787 1.0128 0.8598
Feb-00 1.1800 1.0150 0.9600
Mar-00 1.1800 1.0150 0.9600
Apr-00 1.1700 1.0150 0.8600
May-00 1.1500 1.0150 0.9600
Jun-00 1.2654 1.0150 1,0500
Jul-00 1,3876 1.0150 1.0500
Aug-00 1.5324 1.0150 1.0500
Sep-00 1.5598 1.0150 1.0500
Oct-OO 1.5520 1.0150 1.0500
Nov-00 1.5057 1.0150 0.9500
Dec-00 1.3968 1.0150 0.8500
Source: Ken Bailey, Penn State, Jan. 14,2000.
1/ At 3.5 percent butterfat.
2/ As of January 14,2000.
Last
Low
Low
Last
7010
7220
6970
tO4O
7250
7347
7490
6980
7190
6957
7010
7225
7332
7417
6960
7170
6930
6995
7207
7317
7417
Open
1140
1200
1184
1224
1284
High
1142
1202
1186
1226
1284
1340
Volume Open_lnt
1989 16431
0.8750 0.8750
1.1465
1.1465
0.8639
1.0131
0.1917
Prev.
Volume
5032
4310
1406
233
142
107
31
Chge
Prev.
Chge
Volume
8685
7053
2726
989
244
131
58
La«t Chg* V v
1140 +2
1200 +2
1180 unch *>
1220 unch
1280, -4
Low
1134
1194
1180
1220
1276
13(40
24-Dec-99 17-Dec-99
1.1500 1.1780
1.1438 1.1810
1.0300 1.0300
1.0300 1.0300
0.8925 0.9050
18-Dec-99 11-Dec-99
1.1498
1.1612
0.8785
1.0067
0.1903
1.1100 1.0913
1.1355 1.1142
0.8879 0.9524
1.0123 1.0127
0.1898 0.1898
Class 111 CME BFP
Forecast 1/ Futures 2/
Prev.
Open_lnt
15817
18290
8573
2562
1792
984
292
23
Prev.
Open_lnt
43757
50192
20320
11030
4073
3128
2438