Al6-Lancaster Farming, Saturday, February 12, 2000 GRAIN. CATTLE, HOG. &MILKBFP FUTURES MARKETS Markets Courtesy of Chicago Board and Mercantile Exchange Closing Bids: Thursday, February 10,2000 Soybeans Daily Prices As ofThursday, 10 February Symbol:S MAR 00 MAY 00 OUL 00 AUG 00 SEP 00 NOV 00 JAN 01 MAR 01 JUL 01 NOV 01 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 Total 02/09/00 Oats Daily Prices As of Symbol:o 02/10/00 MAR 00 02/10/00 MAY 00 02/10/00 JUL 00 02/10/00 SEP 00 02/10/00 DEC 00 02/10/00 MAR 01 Total 02/09/00 Weekly Dairy Market Outlook By Ken Bailey Penn State University February 4,2000 USDA Announces January Class. Prices -Class II Price $ll 43/cwt=2( Class 111 Price $lO 0: lass IV Price $10.73/cwt Barrel mces wi USDA announced the remaining class prices for January 2000 These prices are derived from the following NASS averages for January: butter: $0 8820 per pound nonfat dry milk: $1.0115 per pound, cheese: $1.1517 per pound; and dry whey: $0.1857 per pound. An important reference is that NASS cheese prices'(an average of block and barrel prices) last January 1999 averaged $1 7225 per pound and butter averaged $1 4154. These commodity prices were used to determine component values. These are important prices since three of the four (butterfat, protein, and other solids) will appear on milk checks for those farmers that ship milk to component pricing orders (8 of 11). For January 2000 the component values were: butterfat: $0 9366 per pound, nonfat solids: $0.8574 per pound, protein: $2.1677 per pound; and other solids: $0.0503 per pound The Class I base price (to which the differential is added) and part of the Class II price have already been announced earlier. The January Class I base price at 3 5 percent butterfat is $10.90 per cwt That compares with the Class I mover from a year ago of $l6 84 (see Table 3). The January Class II skim milk price was announced at $8.42 per cwt. The rest of the class prices were announced by USDA on Volume Open_Xnt 40366 175991 - Thursday, 10 February Open 1092 1152 1142 1174 1254 High 1102 1170 1154 1190 1270 1326 Volume Open_Xnt 2234 17315 February 4, 2000. Most of these prices are on a skim and butterfat basis For comparison purposes only, USDA computed class prices on a hundredweight basis adjusted to 3 5 peicent butterfat. They were: Class II: $1143, Class 111 $lO 05, and Class IV $10.73 i/cwt So, what do these prices mean 9 First, the Class 111 price still has a lot of meaning to dairy farmers. That's because it is a major part of their milk check Farmers paid on a component basis will see butterfat, protein, and other solids prices on their milk check. Combined in a formula, these prices are similar to a farm-level Class 111 price. If a farmer has standard component levels, their Class 111 value will be similar to the announced Class 111 price However, if their component levels are above average, their Class 111 value will exceed the announced Class 111 price. The other class prices (I, 11, and IV) are used by the Market Administrator in each order to compute a pool value. This is similar to the old blend price It is from the pool value that a market-wide producer price differential, or PPD, is computed. It is simply the pool price less the Class 111 price. Table 3 provides a forecast of Class prices for the rest of the year and compares this forecast to similar prices for 1999. Milk prices will be depressed the first six months of 2000. Thereafter, prices will likely increase. These prices should be considered "rock bottom " Actual prices may be higher. The Chicago Mercantile Exchange announce their 2000 Class 111 settlement prices as of February 4 as follows: February: $9.65, March: $10.05; April: $10.27; May: $10.80; June: $11.55; July: Last Chge 5130 +92 5220 +B6 5304 +B4 5316 +B6 5336 +B4 5402 +B2 5470 +BO 5534 +74 5600 +B4 5530 +7O Low 1090 1152 1140 1174 1252 1326 Last Chge 1102 +l6 1166 +l6 1152 +l6 1190 +2O 1266 +22 1326 +l4 Table 3. Forecast of Federal Order Milk Prices, 2000 Jan 16.84 10.90 17.14 11.43 Febl/ 17.34 10.71 17.64 11.46 Marl/ 16.27 10.73 16.57 11.43 Aprl/ 10.27 10.73 10.57 11.43 May 1/ 11.62 10.73 11.92 11.90 Jun 1/ 11.81 11.20 12.11 12.12 JuM/ 11.26 11.43 11.56 12.13 Aug 1/ 11.42 11.47 11.72 12.13 Sep 1/ 13.59 12.54 13.89 12.17 Oct 1/ 15.79 13.05 16.09 12.17 Nov 1/ 16.26 13.56 16.56 11.75 Dec 1/ 11.49 13.60 11.79 11.32 1/ Actual prices for January 2000, forecasts thereafter. Forecasts provided by Ken Bailey, Penn State University, Feb. 4, 2000 Lean Hogs Daily Prices As ofThursday, 10 February Date 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 Composite Volume Openjnt 02/09/00 13324 58438 Live Cattle Daily Prices As ofThursday, 10 February Date 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 02/10/00 Composite Volume Openjnt 02/09/00 15586 129591 Table 1. Chicago Mercantile Exchange Prices, Weekly Averages 4-Feb-00 28-Jan-00 21-Jan-00 Cheese 500 lb. barrels 40-lb. blocks Nonfat dry milk Extra Grade Grade A Butter; Grade AA 0.9575 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: 500 lb. Barrels 1/ 40-lb. blocks Butter 1.0989 1.1140 0.8799 Nonfat dry milk 1.0084 Dry whey 0.1836 Source: Dairy Product Prices, NASS, USDA