From the parlor pit 1-25
Wow! this is some kinda milk market we are in. Here is an excerpt from the CME wrap up by Al Levitt
Strong buying interest continued throughout the day in milk futures. MAR futures posted
a second consecutive day of a limit-up (+75¢) price increase. Over the past week, MAR
jumped $1.77 closing today at $17.00. If this price were to hold, it would be the highest
Class III price since October 2008. The APR and MAY contracts also settled above
$17.00. Milk futures contracts for 2011 averaged $16.52 at the close of trading, an
increase of 37¢ from Friday.
Two days of limit ups. and I didn't here one market analyist talk about it! this will have more to do with food prices in the very near future than what most would ever imagine.
Heres something else. When you here that stocks of something are higher than a year ago you must now what they are being compared to. In december all we heard was butter stocks are up! this caused pressure to be pput on butter prices however just cause they were up from a year ago what did the historical picture really show?
Commercial butter inventory for December was the lowest since 2005, but up 12.0 milion lbs. from November (see chart). This is the fourth time
stocks have increased in December in the past 10 years. Due to the high butter price, some firms are looking to reformulate various products to
reduce or replace the butter/cream content according to USDA’s Dairy Market News. cme group
So a number for something in the ending stocks doesn't mean anything without historical context.
Finally USDA came out with a very bearish number for Dec. milk production. Problem is that no one believes it. THe survey was taken early on in the month. Cull numbers were at record levels for the whole month and continue at these levels. COrn has moved steadily hiogher as has Bean meal. In the past year the saviongs in feed have mostly come from cheap forages. Well that has ended now. with some places out west experiencing prices rises of 25-30% in the past 4 weeks. Out in Washington State dairy cow prices have dropped by $100 per head since the first of the year! some places culls are worth more than average cows!
Good things ahead. If corn doesn't go on a tare! BE safe. JR
Re: From the parlor pit 1-25
had our local meeting last week and for what is if worth they aren't predicting the MILC to be triggered more than 2 months out of the next 12. Won't make much difference with feed prices though.