Al6-LancMter Farming, Saturday, February 5, 2000
GRAIN, CATTLE, HOG,
&MILKBFP
FUTURES MARKETS
Markets Courtesy of Chicago Board and Mercantile Exchange
Closing Bids: Thursday, February 3,2000
Cora
Daily Prices As ofThursday, 3 February
Symbol:C
MAR 00
MAY 00
JUL 00
SEP 00
NOV 00
DEC 00
JAN 01
MAR 01
MAY 01
JUL 01
DEC 01
DEC 02
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
02/03/00
Total
02/02/00
Oats
Daily Prices As of
Symbol:o
02/03/00 MAR 00
02/03/00 MAY 00
02/03/00 JUL 00
02/03/C0 SEP 00
02/03/00 DEC 00
02/03/00 MAR 01
Total
02/02/00
By Ken Bailey
Penn State University
January 29, 2000
Cheese Stuck at Support
Cheese prices steady
No cheese enters CCC
Sales of dairy products
strong!
February advanced prices
out
For all practical purposes,
cheese prices at the Chicago
Mercantile Exchange (CME) are
sitting on the CCC purchase
prices, or support price levels.
The CCC purchase price for block
cheese is $l.lO per pound and for
barrel cheese is $1.07. Since
Western cheese prices are
normally 2-5 cents per pound
cheaper than Central prices, one
could argue that cheese is at
support.
The good news is that cheese
has yet to be sold to the
government (Commodity Credit
Corporation). A buildup of
cheese stocks could delay future
prices increases.
Cheese prices at the CME were
unchanged this week. Block
cheese was $l.ll per pound and
barrel cheese was $1.09 per
pound. Both grades of nonfat dry
milk (extra and Grade A) were
flat at $1.03 per pound. Butter
prices, however rose slightly from
$0.8950 per pound on Monday,
January 24 to $0.91 per pound on
Friday, January 28.
The CME milk futures
reflected this weakness. As of
January 28, futures settlement
prices for 2000 were: January;
$10.10; February: $9.98;
March: $10.30; April: $10.50;
May: $11.00; June: $11.56;
July: $12.43; August: $12.75;
September $12.85; October;
$12.80; November: $12.33; and
December; $12.03. The market
expects the average Class 111 price
for 2000 to be just $11.55 per
Volume Open_lnt
41579 484785
- Thursday, 3 February
High
1112
1170
13 52
1180
1252
1320
Open
1112
1164
1146
1180
1252
Volume Open_lnt
972 16785
cwt. That compares with a BFP
of $12.43 in 1999, $14.20 in
1998, and $12.05 in 1997.
The Economic Research
Service announced commercial
disappearance for dairy products
for the three months September
through November. During this
time period milk production grew
4.2 percent. Beginning
commercial stocks were up 35.3
percent, but imports were down
4.8 percent. So, total supply was
up 8.2 percent. That's a lot. But
commercial disappearance during
this period was up 6.9 percent (on
a butterfat basis). That's very
strong! Consumption for specific
dairy products were: butter up
18.0 percent; American cheese up
13.7 percent; Other cheese up 7.2
percent; nonfat dry milk down
6.7 percent; and fluid milk
products up 0.1 percent.
Even though milk production
is up, sales have been very good.
Table 4. Federal Milk Order Class I Price Information
Northeast (Boston) 1
Appalachian (Charlotte)
Southeast (Atlanta)
Florida (Tampa)
Mideast (Cleveland)
Upper Midwest (Chicago)
Central (Kansas City)
Southwest (Dallas)
Arizona-Las Vegas (Phoenix)
Western (Salt Lake City)
Pacific Northwest (Seattle)
All-Market Average
Source: Dairy Markets News, USDA, Vol. 67, Report 04.
According to these numbers, we
sold more than we produced on a
butterfat basis during this three
month period, resulting in lower
stocks by the end of November
1999.
Chge
-26
-26
-22
-24
-22
-16
-14
-16
-20
-14
-4
unch
Chge
-12
-12
-10
-6
-4
-2
Last
1100
1160
1140
1180
1250
1320
Low
1096
1156
1140
1180
1244
1320
Weekly Dairy Market Outlook
—February 2000-
Class I Class I
Skim Milk
Price
Price
(3.5% bf)
Order
Number
Table 1. Chicago Mercantile Exchange Prices, Weekly Averages
28-Jan-OO 21-Jan-00 14-Jan-00
Cheese:
500 lb. barrels
40-lb. blocks
Nonfat dry milk:
Extra Grade
Grade A
Butter:
Grade AA 0.9000 0.9163 0.9367
Source; Dairy Market News, AMS, USDA
Table 2. NASS Weekly U.S. Average Survey Prices
22-Jan-OO 15-Jan-00 8-Jan-00
Cheese:
500 lb. Barrels 1/
40-lb. blocks
Butter
Nonfat dry milk
Dry whey 0.1798
Source: Dairy Product Prices, NASS, USDA
(http://usda.mannlib.cornell.edu/reports/nassr/price/dairy/1999/).
1/ Adjusted to 39% moisture.
$/cwt
10.97
10.82
10.82
11.72
9.72
9.52
9.72
10.72
10.07
9.62
9.62
10.30
$/cwt
13.96
13.81
13.81
14.71
12.71
12.51
12.71
13.71
13.06
12.61
12.61
13.29
The problem, however, is that
these ending stocks were 17.2
percent higher than November
1998. So, despite great sales, the
perception in the market is that
dairy stocks are building.
Soybeans
Daily Prices As ofThursday, 3 February
Symbol:S
02/03/00 MAR 00
02/03/00 MAY 00
02/03/00 JUL 00
02/03/00 AUG 00
02/03/00 SEP 00
02/03/00 NOV 00
02/03/00 JAN 01
02/03/00 MAR 01
02/03/00 JUL 01
02/03/00 NOV 01
Total
02/02/00
Soybean Meal
Daily Prices As of
Symbol:SM
02/03/00 MAR
02/03/00 MAY
02/03/00 JUL
02/03/00 AUG
02/03/00 SEP
02/03/00 OCT
02/03/00 DEC
02/03/00 JAN
02/03/00 MAR
Total
02/02/00
(Some Markets Not Available At Press Time)
1 0900 1.1000 1.1025
1.1100 1.1138 1.1150
1.0300 1.0300 1.0300
1.0300 1.0300 1.0300
1.1178
1.1432
0.9008
1.0123
Table 3. Federal Milk Order Advance Price
Highlights, February 2000
Two-week NASS Product Price Averages ($/lb.)
Butter: $0.8768
Nonfat dry milk: $ 1.0114
Cheese: $1.1696
Dry whey: $0.1859
Class I Base Price:
Class I
Butterfat
Price
$/lb
0.9627
0.9612
0.9612
0.9702
0.9502
0.9482
0.9502
0.9602
0.9537
0.9492
0.9492
0.9560
Advanced Class IV Skim Milk Pricing Factor;
Advanced Butterfat Pricing Factor
Class I Base Price:
Class II Price:
Advanced Class IV Skim Milk Pricing Factor
Class II Skim Milk Price
Class II Nonfat Solids Price
Source: Dairy Markets News, USDA, Vol. 67, Report 04.
USDA announced advanced
milk prices for February 2000
(see Tables 3 and 4). These
advanced prices are for Class I
milk (skim and butterfat) and
Class II milk (skim only). The
Base Class I milk price (to which
a local differential is added) at 3.5
percent butterfat for February
2000 will be 10.71 per cwt.
Volume
35341
Open_lnt
170888
- Thursday, 3 February
High
1618
1640
1659
1661
1670
1667
1688
1692
1710
Open
1615
1638
1655
1655
1670
1665
1687
1690
Volume Open_Znt
13950 130700
1.1425
1.1627
0.9045
1.0116
0.1853
Low
4980
5070
5154
5174
5180
5240
5330
5390
5460
5400
7-Jan-00
1.1500
1.1760
1.0300
1.0300
0.8750
1-Jan-00
1.1415
1.1675
0.8555
1.0112
0.1883
1.1465
1.1465
0.8639
1.0131
0.1917
This compares to the old Class
I mover for February 1999 of
$17.94. This was the Basic
Formula Price (BFP) lagged two
months. The Class II Skim Milk
Price for February (just part of
the Class II price) will be $8.42
per cwt.
USDA has yet to announce the
actual class prices or the butterfat,
protein
31-Dec-99
1.1563
1.1675
1.0300
1.0300
0.8750
25-Dec-99
1.1498
1.1612
0.8785
1.0067
0.1903
$7.72 ($/cwt)
$0.9302 ($/lb.)
$10.71 ($/cwt)
$7.72 ($/cwt)
$8.42 ($/cwt)
$0.9356 ($/lb.)