Al6-Lancaster Fanning, Saturday, October 27,2001 GRAIN, CATTLE, HOG. & MILK BFP FUTURES MARKETS Markets Courtesy of Chicago Board and Mercantile Exchange Closing Bids: Thursday, Oct. 25,2001 Corn 246 1/2 254 3/4 t i i W 261 [261 1/4 [ 260 i 260 a Soybeans __ . _ T _^_. Month [opening[ High 01 NOV 425[ l/2|428 1/2 428 [428 1/4 +36 432143 V 1/2 431 1/2[436 1/4 [435 1/2 |435 3/4f +4O 438 1/2|443 1/4 4373/4 441 3/4 441 441 1/4 +34 443 l/2f447 1/2 443 447 446J./2 |446 3/4 +32 448 l/2[ 452 448 1/4 450 1/2 450 3/4 [450 1/2 +22 451 1/2 449 450 b I oajpfUT, ioWl mPSEI mm 450 1/2 450 r */»i ™ ta—er i~^WgWHlWg9 , l ■T Sill Soybean Meal 158.3 156.2 w\. m mmv 153.3 151.3 151.2 I pj^ul 6£iei> 150.71 151.0 150.2 flSgg 150.3 151.3 KtenlnaMj waff Weekly Dairy Market Outlook Ken Bailey Penn State Oct. 19,2001 Markets Overreact To Demand Slowdown • Blocks fall to within 6.6 cents per pound of support prices. • Butter falls 20 cents to $1.25 per pound. • September milk production down 0.7 percent. • Futures markets reflect lower prices. The dairy commodity mar kets appeared to be holding through Wednesday this week, but took a sharp drop on Friday, Oct. 19. Block and cheese prices at the Chicago Mercantile Ex change are now within 7 cents per pound of support price levels. Grade AA butter prices at the Chicago Mercantile Exchange, which were holding at $1.50 per pound, dropped to $1.25 per pound by Friday. Western nonfat dry milk, however, is holding steady at about a nickel per pound above support price levels. Part of the reason for such sharp drops in commodity 246 1/4 247 3/4 254 3/4 254 3/4 448 1/2 452 452 1/4 151.1| 153.5 153.3 153.4 +22 151.1 [~~153.2 ~[~153.2| ' +22 153.7 153.5 152.3 150.7 152.5 150.5[152. 152.4 150. 150.0 151.0 150.0 150. 150.7 b ■t -' A-? t : ‘jfejr j prices may be due to market psychology. Market prices were at near-record high levels a month or two ago. The market then overreacted at the first sign that there was a little too much inventory and demand weak ness. Buyers held off purchases in anticipation of even lower prices. This led to still lower prices. The market does not appear to be reacting to any change in the milk supply. USDA an nounced September milk pro duction in 20 major dairy states was down 0.7 percent relative to a year ago. Cow numbers con tinued to decline, although at a slower rate than earlier in the year. And production per cow rebounded just 7 pounds per head from a year ago. This indi cates more of the same news, that cow numbers have not re bounded and production per cow is still about what it was a year ago. Demand picture, however, has changed. USDA reports that demand for butter and cheese for retail and fast food service is steady, but demand from travel and upscale restaurants has slowed. This has swelled the 219 1/4 219 227 3/4 226 233 3/4 232 3/4 237 247 246 1/2 254 3/4 I 260 n S-rtj, r> ! 451 a 451 a 450 b 453 3/4 489 n 152.2 152.1 152.1 a[152.0[~ +lB 0 b 5 b 150.6 150.8 a 151,0 a T ISO - 7 5 b 151.2 aj150.9| +l4 a-'’ Unch 219 Unch 226 3/4 + 2 232 3/4 237 3/4 Unch Unch 246 3/4 Unch 254 3/4 260 -20 260 ' f*nl* + 24 450 1/2 + 14 450 1/2 + 24 453 3/4 Unch 489 + 21 + 15 + 14 -V r - pipeline and has caused traders in Chicago to hold off on further purchases. It is likely that this problem will persist through the holiday season. Anyone who has been to the airports since Sept. 11(1 traveled twice) knows that there are fewer people traveling, eating out, and staying in hotels. Low cheese and butter prices are just now showing up in the weekly NASS survey reports. The NASS report released today for the week ending Oct. 13 shows block cheese prices fell about a nickel per pound from the week before to $1.6597. Thus, it appears that this re flects the drop in cheese prices at the Chicago Mercantile Ex change for the week of Oct. 1-5. (There is a two-week lag be tween announced prices in Chi cago and announced NASS survey prices). That means some of the lower cheese prices expe rienced in the last two weeks will show up in the Class 111 price for October. The Class 111 futures price for October is about $14.45 per CWT as of Oct. 19,2001. This Is a significant drop from around $15.40 per CWT for an October futures contract a month ago. Most of this is because of the lower cheese prices from the NASS survey. Thereafter, the Lean Hogs Date 10/25/01 Dec 01 4720 478546704757 10/25/01 Feb 02 5060 506049775037 10/25/01 Apr 02 5270 5295 5227 5265 10/25/01 May 02 5955 60205955 5985 10/25/01 Jun 02 6165 620761406180 10/25/01 Jul 02 6000 604059906032 +27 10/25/01 Aug 02 5940 59405895 5940 +2B 10/25/01 Oct 02 5310 5335 53105317 +7 Composite Volume Open_lnt 10/24/01 8385 32867 Live Cattle Date 10/25/01 Oct 01 6530 656064726505 10/25/01 Dec 01 6650 677566226735 10/25/01 Feb 02 7035 71407005 7102 10/25/01 Apro2 7250 730072107297 10/25/01 Jun 02 6810 68556785 6852 10/25/01 Aug 02 6810 685567806847 +7 10/25/01 Oct 02 6870 690068706870 unch Composite Volume Open_lnt 10/24/01 17019 106482 Pork Bellies Date 10/25/01 Feb 02 6585 674765806682 +75 10/25/01 Mar 02 6550 672065406600 +5O 10/25/01 May 02 6770 686067506820+190 10/25/01 Jul 02 6775 6805 67506750 +75 10/25/01 Aug 02 6800 680067506800 -170 0 Composite VolumeOpenjnt 10/24/01 769 2228 Oats futures market expects the Class 111 prices to fall to $10.75 per CWT for November and $10.90 for December. This reflects a NASS cheese price of about $1.20 per pound from now to the end of the year. It’s worth noting that produc ers who participated in USDA’s Dairy Options Pilot Program, or who used forward contracts or hedged milk for October through December, likely locked in significant gains. The Novem ber 2002 futures contract fell from a high of $14.50 per CWT during the second and third weeks of September to $10.75 as of Oct. 19, 2001. November, De cember, and January futures have been under considerable downward price pressure be cause of lower cash market prices. On the other hand, pro ducers who used the futures markets for March though Sep tember of this year likely locked in prices $2-3 per CWT below cash market prices. This shows how volatile the cash market is. The futures prices still look attractive for dairy producers for the months of January though June. Class 111 is trading $11.40-$12.20 per CWT and Class IV is trading $12.40- $12.70. A conservative strategy would involve locking in just 10- ~ , ¥ . . t » A Previous Previous Open High Low Last Chge Vo|ume open 6021 20641 1651 6435 446 3275 34 789 176 1008 36 316 12 175 8 227 Open High Low Last Chge I^ e y ious Prions Volume Open lnt 1044 1098 9281 44215 3199 29606 1885 15131 1131 13083 444 2912 35 437 rv . , , , Previous Previous Open High Low Last Chge Vo lume Openjnt 693 1944 44 188 31 65 1 27 -13 -23 -7 +8 +l5 -35 +45 +35 +3O +l7 f t. .f r—Jv<*r 30 percent of your milk market ings for select months during February-May using the Class 111 futures. That way, if Class 111 prices fall to $9-$lO this spring, you will have some price protection. On the other hand, if Class 111 prices rebound from expected levels, you would receive that higher price on 70- 90 percent of your milk market ings. The same strategy could work for Class IV as well, al though there may be greater op portunities for higher prices beyond the spring months. Average Farm Feed Costs for Handy Reference To help farmers across the state to have handy reference of commodity input costs in their feeding operations for DHIA record sheets or to develop livestock feed cost data, here’s last week’s average costs of various ingred ients as compiled from regional reports across the state of Pennsylvania. Remember, these are averages, so you will need to adjust your figures up or down according to your location and the quality of your crop. Corn, No.2y 2.19 bu., 3.92 cwt. Wheat, N 0.2 2.49 bu., 4.15 cwt. Barley, N 0.3 —1.43 bu., 3.06 cwt. Oats, N 0.2 —1.42 bu., 4.43 cwt. Soybeans, No.l —4.03 bu., 6.73 cwt. Ear Corn 55.31 ton, 2.77 cwt. Alfalfa Hay —120.00 ton, 6.0 cwt.
Significant historical Pennsylvania newspapers